Boeing's Stock Soars: Can Geopolitical Thaws and Aviation Demand Sustain the Rally?

The recent decision by China to lift its ban on Boeing aircraft deliveries—a move tied to a temporary tariff truce with the U.S.—has sent Boeing’s stock soaring, rising 1.6% on May 12 alone to its highest level in over a year. This short-term boost raises a critical question: Is Boeing’s recovery sustainable, or is this merely a fleeting reprieve in a decades-long battle with geopolitical and commercial headwinds? Let’s dissect the catalysts and risks to determine whether Boeing’s stock merits a buy.

Near-Term Catalysts: A Geopolitical Lifeline and Production Momentum

The tariff truce—slashing U.S. tariffs on Chinese goods to 30% and China’s retaliatory duties to 10%—has immediately alleviated pressure on Boeing. The resumption of deliveries to China, where 50 Boeing jets were slated for 2025 delivery, avoids the costly scramble to reassign aircraft to alternative buyers like India or Saudi Arabia. This is critical for Boeing’s order backlog, which stood at 6,319 aircraft as of March 2025, with 75% tied to the 737 MAX.

The company’s production ramp-up is another key driver. While Boeing currently builds just 31 737 MAXs monthly, it aims to hit 52/month by year-end. This acceleration, coupled with inventory of 97 undelivered MAXs, could fuel a 65% jump in 2025 deliveries to 570 aircraft. Meanwhile, the U.S.-UK trade pact—a $10 billion deal for 32 Boeing 787-10s—adds momentum, proving Boeing’s political clout remains intact.

Long-Term Risks: Geopolitics, Competition, and Boeing’s Own Flaws

The tariff truce is a 90-day Band-Aid, not a cure. U.S.-China trade tensions remain unresolved, with Beijing’s aviation market—projected to account for 20% of global demand over two decades—still favoring Airbus. Since 2019, Airbus has secured 332 orders from Chinese carriers versus Boeing’s paltry additions. The 737 MAX’s safety stigma—rooted in its 2019 grounding after two fatal crashes and a 2024 door plug failure—continues to haunt sales, even as deliveries resume.

Production bottlenecks also loom. Boeing’s 777X program, delayed by certification issues, faces a 2026 launch at best. The 787 program, hamstrung by supply chain woes, produces just one aircraft/month, far below targets. These challenges could strain Boeing’s ability to meet delivery goals and compete with Airbus’s more reliable supply chain.

The Investment Case: Buy the Dip, but Mind the Minefield

Boeing’s stock surge reflects a cyclical rebound in air travel demand—post-pandemic traffic is surging, and airlines worldwide need new planes. The 737 MAX’s backlog, while large, is a double-edged sword: it secures near-term revenue but underscores reliance on a single model amid safety skepticism.

Buy Signal: - The tariff truce buys Boeing time to reallocate inventory and negotiate new orders. - Global air travel demand is at a 20-year inflection point, favoring Boeing’s narrowbody dominance.

Hold/Wait Signal: - The truce’s expiration in August 2025 could reignite trade wars. - Airbus’s gains in China and Boeing’s 777X delays threaten long-term market share.

Conclusion: A Calculated Gamble on Geopolitical and Cyclical Tailwinds

Boeing’s stock merits a buy for investors willing to bet on a cyclical rebound in aviation and a sustained thaw in U.S.-China relations. The 737 MAX’s backlog and global demand for narrowbodies provide a floor for near-term gains. However, this is a high-risk, high-reward play: geopolitical volatility, supply chain hiccups, and Airbus’s relentless competition could derail progress.

Investors should pair this position with close monitoring of Boeing’s production ramp-up, 777X certification updates, and U.S.-China trade negotiations. For now, the window of opportunity is open—but it may close faster than Boeing’s jets can take off.