During a September 8 episode of Mad Money, Jim Cramer examined the broader aerospace ecosystem following GE Aerospace’s (NYSE:GE) nearly $12 billion agreement to acquire castings specialist Consolidated Precision Products (CPP). Commenting on the strategic importance of supply chain control and the enduring strength of commercial and defense aviation despite rising oil prices, Cramer stated:
I still believe in the data center, but I also want to open your eyes to other opportunities. This morning, for example, GE Aerospace spent nearly $12 billion to buy a castings company called Consolidated Precision Products to integrate this key segment into its supply chain. It’s vital for both commercial aircraft and particularly defense, both of which are booming. Now, on a day where oil’s up, you might not want to focus on anything airline related, but travel’s been booming the whole time, the whole time the Iranian war’s been going on. This acquisition will pay off quickly for GE, making it more likely that they can accelerate production. This is also good news, therefore, for Boeing, a huge customer of GE that needs to boost its production speed.
GE is relatively close to its highs, deservedly so. Boeing? Nowhere near its high. Yet the order book is full. Last week, there was this negative article about how Boeing is being hurt by the problem-filled Spirit AeroSystems acquisition. It made that one two years ago. But that actually had to be done because Boeing, like GE Aerospace, needs to get better control of its supply chain. Aha, you say, who needs that kind of problem? Boeing just reported its slowest deliveries in 4 months. I come back and say, wait a second. First, the problems from the Spirit deal are now behind them. You know what? The story is actually old news.
Plus, CEO Kelly Ortberg has made it clear that orders would be lumpy. I knew that. And look, I know the high price of oil, particularly jet fuel, is bad news for the airlines. But the higher price of fuel also makes these new engines and airplanes far more valuable than before. Why? They’re way more energy efficient. It’s a good situation that has nothing to do with the data center. It does require more, better tech that AI can help with.
Industrial Scale and Revenue Backlog Comparison
GE Aerospace and The Boeing Company (NYSE:BA) represent two distinct pillars of the aerospace manufacturing ecosystem, operating at massive commercial scale. GE Aerospace reported second-quarter revenue of $13.3 billion, up 21% year-over-year, driven by strong commercial engine services and record internal shop visit output. Its total order backlog extends past $210 billion, supported by sustained airline demand for propulsion systems and aftermarket maintenance.
On the other hand, The Boeing Company operates on a larger top-line assembly scale, posting $24.6 billion in second-quarter revenue on the back of 171 commercial airplane deliveries. Boeing’s total company order backlog sits at an imposing $715 billion, including more than 6,200 commercial aircraft. However, its assembly lines have experienced temporary delivery swings and output adjustments.
Execution Risks and Financial Headwinds
Fixing a broken aerospace supply chain is messy work, and both giants carry distinct structural vulnerabilities that form the bear case for each stock. GE Aerospace aims to fund its $11.75 billion acquisition of Consolidated Precision Products with a mix of cash and new debt financing, which could increase leverage and create integration risk once the transaction closes. Any misstep in integrating CPP or managing shop-visit turnaround times could compress margins across its high-value engine programs.
The Boeing Company faces an even heavier uphill battle as the company carries a towering $45.9 billion consolidated debt load and continues to absorb operational losses in its Commercial Airplanes segment, which posted a negative 2.7% operating margin along with stubborn defense program cost overruns. While elevated jet fuel prices theoretically improve the long-term value proposition of fuel-efficient fleet upgrades, uneven delivery schedules and factory rework leave both manufacturers exposed to severe cash flow volatility if assembly output stumbles.
Hedge Fund Ownership and Short Exposure
According to Insider Monkey’s database tracking elite institutional holdings, GE Aerospace stock was held by 113 hedge funds in Q2 compared to 119 in Q1. Meanwhile, 90 hedge funds had a stake in The Boeing Company in Q2 compared to 99 in the previous quarter. Short interest metrics show measured positioning across both stocks, with the short percentage of float standing at 1.29% for GE Aerospace and 1.90% for Boeing, highlighting low overall bearish conviction.
For investors evaluating the aerospace sector, GE Aerospace provides a high-margin, cash-generative propulsion play, whereas The Boeing Company offers leveraged exposure to an enormous commercial recovery once assembly schedules normalize. As supply chain integration matures and fuel efficiency demands speed up, both companies remain significant to the multi-year aviation supercycle.
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