MW Boeing's stock has been surging. Here's why it has become a FOMO play.

By Steve Gelsi

Boeing's fundamentals have been improving, but the recent spike up in the stock seems to be more about investors being afraid not to own it, Vertical Research says

Investors have been bidding up Boeing Co.'s stock in recent weeks, but that seems to be more about what they are afraid of than their excitement over the company's improving fundamentals.

The aerospace giant's stock $(BA)$ has rallied 9.7% in May as of midday trading Friday and has soared 47.2% since it closed at a 21/2-year low on April 4. The stock is now up 13.6% in 2025, while the S&P 500 index SPX has lost 1.5%.

Analyst Robert Stallard at Vertical Research noted that the U.S. trade situation is looking better, particularly with China, while Boeing's latest earnings report showed improvement and the pace of 737 production has been encouraging.

While those are all bullish for the stock, that's not what's really driving the recent spike higher, he said. Basically, he called it a FOMO rally.

"Perhaps the largest factor that we think has driven the rally in the Boeing share price in the last month has been investors' fear of missing out," Stallard wrote in a note to clients.

He noted that the company is one of the few giants in the aerospace sector, along with GE Aerospace $(GE)$ and RTX Corp. $(RTX)$. So when the sector starts to rally, investors have to own the leaders to keep pace with the sector trackers, and their peers.

Since Boeing's stock has this year underperformed shares of both GE Aerospace and RTX, as well as the sector, those investors have some catching up to do.

"We think there remains 'muscle memory' to own Boeing in an aerospace upcycle, and as a major benchmark constituent it is a potential career limiting move if an investor is underweight when the stock is rallying," Stallard said.

The iShares U.S. Aerospace & Defense ETF ITA has climbed 17.2% in 2025, while GE's stock has run up 38.9% and RTX shares have advanced 15%.

Boeing is the sector ETF's third-largest-weighted component, behind second-place RTX and leader GE.

The skies aren't completely clear for Boeing or the aerospace sector in general. President Donald Trump's threat on Friday of possible escalation of the trade war against the European Union highlights how fluid and uncertain the outlook is.

"There remains the risk of further trade disputes and we've yet to see whether this issue impacts global GDP growth and airline [revenue]," Stallard said.

That's likely why Stallard isn't so bullish on the stock. While he raised his price target to $205 from $160, the new target implies just about 2% upside from current levels.

-Steve Gelsi

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May 23, 2025 12:17 ET (16:17 GMT)

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