Boeing's Struggles Highlight Shift to Defense and AI in Aerospace Investing

Jim Cramer’s recent analysis of boeing (NYSE:BA) has sparked heated debate among investors, with the “Mad Money” host labeling the aerospace giant “snake bit” due to persistent operational and reputational challenges. While acknowledging Boeing’s long-term strategic value, Cramer is steering investors toward defense stocks and artificial intelligence (AI) as superior growth avenues for 2025. Here’s why Boeing’s struggles are reshaping aerospace investing—and where the real opportunities lie.

Boeing’s Struggles: A “Snake Bit” Legacy

Boeing’s reputation as a global aerospace leader has been tarnished by recurring missteps. Cramer highlights its “hard time making its planes,” citing production bottlenecks and poor cash flow as key drags. The company’s delivery delays, exacerbated by China’s suspension of Boeing plane deliveries in retaliation for U.S. tariffs, have further eroded investor confidence. Even Boeing’s $36 trillion national debt-related financial flexibility has failed to offset these setbacks.

While Boeing’s quantum satellite initiative (Q4S) signals innovation, Cramer remains skeptical. He points to past failures like the Starliner space capsule’s issues, arguing that the company’s operational mismanagement overshadows its technological ambitions. “I’d like to own the stock if these problems were fixed,” he admits, but cautions that Boeing’s current trajectory makes it a risky bet.

Defense Stocks: A Safer Bet in Tumultuous Times

Cramer’s preferred aerospace plays lie in defense, where geopolitical tensions and rising military spending are driving demand. He highlights Northrop Grumman (NOC), Raytheon Technologies (RTX), and Lockheed Martin (LMT) as top picks. These firms benefit from stable government contracts and global demand for advanced defense systems, particularly as nations like China and Russia escalate military modernization.

Data shows defense stocks have outperformed Boeing in 2024-2025, with Northrop Grumman up 18% year-to-date and Lockheed Martin gaining 12%. Cramer argues this resilience stems from their diversified portfolios and insulation from geopolitical trade disputes.

AI: The Unstoppable Growth Engine

Cramer’s strongest recommendation lies outside traditional aerospace entirely: AI-driven companies. He calls AI “the greatest investment opportunity of our lifetime,” citing a specific AI stock that surged 200% since early 2025 while rivals like NVIDIA (NVDA) and Broadcom (AVGO) fell 25%. This stock, trading at less than 5x earnings, is positioned to capitalize on exponential growth in AI infrastructure, cybersecurity, and clean energy.

The AI thesis is bolstered by its ability to disrupt multiple industries, including aerospace itself. For example, AI is already optimizing aircraft design, supply chains, and predictive maintenance—areas where Boeing’s legacy systems lag. Cramer’s preference for AI reflects its shorter-term returns and lower risk compared to Boeing’s uncertain turnaround.

Hedge Funds and Analysts: Betting on AI Over Boeing

Despite Boeing’s strategic importance, hedge funds and analysts are shifting focus. Boeing ranks 3rd on Cramer’s list of top stocks, with 103 hedge funds holding it as of Q4 2024—yet most prioritize AI. Analysts’ average price target for Boeing’s stock implies a 12% upside, far below the 61% upside projected for Cramer’s top AI pick.

Meanwhile, defense stocks like Raytheon and Lockheed have seen upgrades, with analysts citing strong earnings and geopolitical tailwinds. Even GE Aerospace, a subsidiary of General Electric, has outperformed peers, benefiting from its focus on hybrid-electric propulsion and AI integration.

Conclusion: The Aerospace Shift Is Unstoppable

Jim Cramer’s stance reflects a broader market reality: Boeing’s operational struggles and geopolitical risks have made it a “snake bit” investment. While its quantum initiatives and trade-deficit mitigation potential offer long-term hope, the path to recovery remains fraught.

Investors seeking aerospace exposure in 2025 are better served by defense stocks like Northrop Grumman and AI-driven disruptors. With AI stocks offering 10x+ return potential over a decade and defense giants benefiting from $800 billion in U.S. military spending, these sectors dominate the growth narrative.

Boeing’s story is far from over, but for now, the market’s vote is clear: innovation and resilience, not legacy manufacturing, define the future of aerospace.

Data sources: Cramer’s commentary, Insider Monkey, Bloomberg, and analyst consensus reports.