Key Points

• Joby Aviation's business model differs significantly from that of its peers.

• There's reason to believe its vertically integrated strategy will win out.

• The upside potential is significant; provided the certification process goes smoothly, Joby has a big future.

• 10 stocks we like better than Joby Aviation ›

The electric vertical take-off and landing (eVTOL) market is crowded, but that doesn't mean it's a winner-takes-all scenario. Different companies have different business models with varying risks and rewards, and Joby Aviation (NYSE: JOBY) is arguably the one with the most reward and also one that's reducing its risk the most in 2025. Is it enough to make it a stock that could set investors up for life? Here's the lowdown.

What makes Joby Aviation different

It's always interesting to compare competitors across a growth industry, and doing so with Joby's peer Archer Aviation (NYSE: ACHR) makes for a fascinating comparison. The first conclusion is that they have significantly different models. The second is that the nature of their models allows for more than enough room for both in the market, and the third is that Joby Aviation is making real progress in de-risking the elements of its business that are subject to greater market uncertainty.

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In a nutshell, you can think of Joby Aviation as a "go it alone" player in the industry, backed by a heavyweight manufacturing partner in Toyota, as well as other investors such as Uber and Delta Air Lines. Its business model is different from Archer's and the rest of the industry in two key ways:

• Joby Aviation doesn't plan to sell its aircraft and prefers to develop much of its technology in-house, having its own powertrain and electronics manufacturing facility in California.
• As quoted from its Securities and Exchange Commission (SEC) filings, Joby plans to "own and operate our aircraft ourselves, building a vertically integrated transportation company that will deliver transportation services to customers."

Both points are crucial to understanding the investment case.

Joby's in-house development

Archer, along with other eVTOL companies such as Germany's Lilium and the U.K.'s Vertical Aerospace, makes no secret of the fact that it has leading aerospace and automotive companies as partners in providing solutions. The advantage of heavy integration with established partners in developing technology is a simplified and less risky process, which, theoretically, leads to earlier certification.

Image source: Getty Images.

For example, Archer partners with Honeywell for actuators and climate systems, Hexcel for advanced composite materials, Safran for avionics, and Stellantis (also a key investor). Honeywell is a key strategic technology partner of Vertical Aerospace and partners with European aerospace companies GKN and Leonardo.

Lilium partners with GE Aerospace in flight data management and Honeywell (also an investor) for flight control, avionics, and propulsion unit sensors.

As such, Joby's more "go it alone" approach could be deemed more risky. However, it has received significant investment (up to $894 million) from a manufacturing heavyweight, Toyota. Moreover, the Japanese giant is assisting in improving Joby's manufacturing processes and optimizing design.

A vertically integrated transportation company

Here again, Joby is different. It doesn't want to sell its aircraft; instead, it wants to handle the commercialization of transportation services itself. Again, this is a more risky business model, as it implies commercial business expertise in addition to research & development and manufacturing expertise. It's somewhat akin to Boeing or Airbus deciding to operate an airline.

On the other hand, there's a reason why Uber has invested $125 million in Joby so far: the obvious potential to integrate their services. Similarly, Delta Air Lines is investing up to $200 million in Joby to transport passengers to airports. With Delta increasingly focusing on premium travelers and looking to offer experiences that engender loyalty, the Joby tie-in is a significant plus.

Image source: Joby Aviation.

Can Joby Aviation be a life-changing investment?

Given the current trends in the global economy, whereby technology is enabling fundamental shifts in how industrial and transportation companies operate (think Tesla selling direct or Uber not needing to own cars), Joby's business model makes perfect sense and has the potential to create more value for shareholders over the long term.

Meanwhile, while its peers are working with leading aerospace companies, Toyota is a formidable manufacturing entity and partner, and the Toyota Production System is the precursor to all the lean manufacturing practices successfully implemented by GE Aerospace and many others.

There are no guarantees in nascent technology fields such as eVTOL, and diversification is key when investing in growth stocks. Still, Joby Aviation is a strong candidate for an investment that could set you up for life.

Should you invest $1,000 in Joby Aviation right now?

Before you buy stock in Joby Aviation, consider this:

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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool recommends Delta Air Lines, GE Aerospace, Hexcel, and Stellantis. The Motley Fool has a disclosure policy.

Shares in aerospace giant Airbus (OTC: EADSY) rose by as much as 3.1% in early trading as the Paris Air Show concluded for industry professionals (it remains open to the public until Sunday). Airbus had a lot to say and $21 billion in orders to announce , but unfortunately, its great rival, Boeing (NYSE: BA), had very little to say.

Airbus and Boeing at the Paris Air Show

While Boeing didn't release an official statement on the matter, it's widely reported that Boeing scaled down its participation and elected not to announce new orders following a recent Air India crash involving a Boeing 787 Dreamliner. Boeing had previously announced it would offer full support for the investigation currently taking place.

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Consequently, Airbus took center stage in the commercial aerospace industry, announcing $14.2 billion in firm orders and a further $6.7 billion under memoranda of understanding (MoUs).

Among the 148 firm orders was the first-ever order from LOT Polish Airlines for 40 A220 aircraft. All Nippon Airways, a subsidiary, ordered 27 A321 airplanes. Riyadh Air of Saudi Arabia ordered 25 A350 wide-bodies and will be the first Saudi airline to fly the 350. Vietnam's VietJet signed an MoU for 100 Airbus A321neo aircraft.

Image source: Getty Images.

Where next for Airbus?

The strength in A350 (which competes with the Boeing 787) and A321 orders (a highly successful plane Boeing is struggling to compete with) is a continuation of an order trend this year. Meanwhile, the 40 A220 orders are a shot in the arm for an aircraft that Airbus has found it difficult to sign deals on in the last year or so.

Overall, it was a positive air show for Airbus, and that's reflected in the stock price today.

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Boeing (NYSE: BA) received some positive commentary over a critical issue for its future. At a recent International Air Transport Association (IATA) summit, the president of Emirates airline, Tim Clark, made positive comments on the new widebody 777X, which should reassure investors that Boeing is on the right track under CEO Kelly Ortberg. Here's why.

Emirates airline is a big deal

According to a Reuters article, Clark stated that Emirates had been informed it would receive its first 777X in the second half of 2026 or the first quarter of 2027. In addition, he declared himself "cautiously optimistic" over the turnaround at Boeing and noted progress at the aerospace giant.

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These are just comments. However, they matter, and particularly so when they come from the head of one of the largest international airlines in the world, Emirates. In addition, while Lufthansa is set to receive the first 777X in 2026, Emirates is, by some distance, the largest customer for the 777X at present. The airline has 205 unfilled orders for the 777X, followed by 97 unfilled orders from Qatar Airways, with Singapore Airlines a distant third with 31.

The 777X is also pivotal to Boeing's future. The new widebody is larger and has a more extended range than Boeing's 787 Dreamliner and will service the high-demand long-haul international travel market. Generally, Airbus is considered the leader in the narrowbody market, while Boeing holds the lead in the widebody market. That said, Airbus has surpassed Boeing in the widebody market in recent years, partly due to quality control issues with the 787 and ongoing, costly delays on the Boeing 777X.

Image source: Getty Images.

Why the 777X matters to investors

Simply put, Boeing needs to keep the 777X on track, not least because airlines are likely to be more hesitant in placing orders when they see continued delivery delays. Furthermore, the delays are extremely costly, in terms of charges, and tying up capital in inventory that won't be utilized until deliveries take place.

The 777X was initially intended to have its first delivery in 2020, and the subsequent delays to that timeline have proved embarrassing and costly for Boeing. In its fourth-quarter 2020 earnings report, Boeing recorded a $6.5 billion pre-tax charge on the program and informed investors that the first 777X delivery would occur in late 2023.

Last October, Boeing announced a $2.6 billion charge, followed by a further $900 million charge in January.

These charges total at least $10 billion. Furthermore, Boeing has inventory tied up in the program, and it's incurring increased research and development costs, with an increase of $525 million in 2023 and $435 million in 2024.

Stemming the flow of these charges and losses would be a significant plus; that's why keeping to the revised 2026 target for first delivery is so important.

It also counts because it discourages airlines from canceling orders and encourages them to place new orders. Suppose Boeing can demonstrate that it can deliver the first 777X in 2026 and effectively ramp up production thereafter. In that case, airlines can begin to build capacity assumptions based on having 777Xs in service at a given time.

Image source: Getty Images.

What's next for Boeing?

As previously discussed, the three key things investors need to see from Boeing are a satisfactory ramp-up in production on the 737 MAX (to an initial 38 a month), a return to profitability for Boeing Defense, Space & Security (BDS), and keeping the 777X on track.

With Boeing making tangible progress on the 737 MAX (management expects to reach a 38-month rate soon), and BDS returning to profitability in the first quarter, the positive commentary on the 777X suggests Ortberg is achieving Boeing's three biggest aims in 2025.

That's something likely to support the stock price as it moves through the year.

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Airbus (OTC: EADSY) is getting a lift from two stock analyst names this morning, as first Barclays lowered its price target on the stock to 185 euros (but maintains an "overweight" rating on the stock, according to StreetInsider.com), while Paris shop Kepler Cheuvreux upgraded the European aerospace giant to "buy" with a 170-euro price target.

Airbus shares are responding with a move 2.8% higher through 10:45 a.m. ET.

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What analysts say about Airbus

Airbus stock is down about 8% over the past month as investors punish the stock for "higher macroeconomic risk" on recession concerns, as The Fly points out today. The stock has already bounced off its lows, however, gaining about 10% over the past three weeks. Kepler, however, believes there are even more gains to be found here and agrees with Barclays that Airbus stock is a buy.

So is Airbus stock a buy?

Are these analysts right about Airbus? Well, it's worth pointing out that rival Boeing (NYSE: BA) just got an upgrade to "outperform" this morning from Bernstein SocGen (part of AllianceBernstein), which sees Boeing's fortunes reviving as it works through problems with its 737 MAX airplane program and begins ramping production up to perhaps 38 planes per month by July, and 42 by the end of this year.

And not meaning to knock Boeing, but when you compare the two stocks side by side, Airbus really does look like the stronger operation right now. Airbus earned $4.4 billion in profit last year, versus Boeing's $11.5 billion loss. Airbus is forecast to grow its earnings to $5.8 billion this year, whereas Boeing will be lucky to earn anything at all. And while Boeing should be on firmer footing by 2026, when it's expected to earn $4 billion, Airbus profits in 2026 could be nearly twice as big -- $7.3 billion!

Listen, at 26 times earnings, even I won't try to make the case that Airbus stock is a bargain. But relative to Boeing, it's clearly the stronger performer. So if Boeing deserves an upgrade, then... why not Airbus?

Should you invest $1,000 in Airbus SE right now?

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The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Airbus SE wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

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Boeing, a leading aerospace manufacturer renowned for its commercial airplane production, released its Q1 2025 earnings on April 23, 2025. The earnings report showcased results that beat analyst expectations, reflecting ongoing efforts to stabilize its operations. Revenue for Q1 2025 reached $19.5 billion (GAAP), surpassing the analyst estimate of $19.38 billion, driven primarily by increased commercial airplane deliveries. The company's Non-GAAP earnings per share (EPS) improved to a loss of $0.49 in Q1 2025, better than the anticipated $1.18 loss, showing a positive shift in its operational execution. The quarter was marked as a promising start with signs of recovery, although challenges in defense operations and supply chain management remain.

Source: Analyst estimates for Q1 2025 provided by FactSet.

Boeing's Business Overview and Strategic Focus

Boeing is an iconic name in aerospace, primarily known for its development and marketing of commercial jet aircraft globally. Its key product lines include the 737, 767, 777, and 787 models. Recently, Boeing has been focusing on enhancing its production capabilities and stabilizing its supply chain, crucial for meeting the growing global demand for its aircraft, as reported in Q1 2025. The Commercial Airplanes segment remains central to Boeing's financial health, contributing significantly to its revenue streams. Ongoing development of innovative aircraft like the 777X and derivatives ensures Boeing remains competitive against industry giants like Airbus.

Boeing's operational success heavily depends on managing supply chain complexities and regulatory compliance. Supply chain efficiency is critical, as delays or quality issues could hurt financial results and erode customer trust. Recent successes in capital infusion have reinforced its financial stability, a positive development amid persistent industry challenges.

Quarterly Highlights and Analysis

Q1 2025 marked a turning point for Boeing's Commercial Airplanes segment as it reported significant growth in aircraft deliveries, with a 57% increase from 83 to 130 airplanes. The 737 program saw a production ramp-up, with plans to boost production to 38 planes per month within the year. However, operating margins (non-GAAP) remained negative at (6.6)% in Q1 2025, underscoring the need for further stabilization.

In contrast, Boeing's Defense, Space & Security segment saw a 9% decline in revenue to $6.3 billion in Q1 2025. This segment showed a slight improvement in operating margins to 2.5% but continued to face challenges, including pre-tax charges related to fixed-price contracts. A contract for next-generation fighter jets has been secured, though it is yet to appear in the backlog, signaling potential revenue ahead.

Margins within the Global Services segment rose marginally to 18.6% in Q1 2025, as Boeing celebrated milestones like the delivery of the 100th 767-300 Boeing Converted Freighter. The services segment's consistent performance affirms its role as a reliable revenue stream, tapping into the aircraft lifecycle management potential.

Free cash flow (non-GAAP) remained negative at $2.3 billion in Q1 2025. Cash and securities stood at $23.7 billion, indicating a slight decrease from $26.3 billion, primarily driven by the free cash flow usage in the quarter. Debt was reduced to $53.6 billion in the first quarter, reflecting the paydown of maturing debt and early repayment of a bond.

Boeing's Future Outlook

Boeing's future outlook emphasizes increased commercial aircraft production, aiming to further stabilize rates and enhance supply chain resilience, with plans to reach a production rate of 38 per month this year. The company is planning to expand the 737 production and anticipates the U.S. Federal Aviation Administration's (FAA) continued approval for ramping up production rates.

Management forward guidance focuses on navigating regulatory frameworks and managing defense contracts to de-risk and align with customer specifications. While uncertainties remain, particularly around the defense sector, robust demand for commercial airplanes provides optimism. Investors should monitor Boeing's progress in clearing backlogs, managing contracts, and sustaining capital improvements, key indicators of its recovery trajectory.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

For the second day running, shares of Europe's Airbus (OTC: EADSY) are declining. As of 11:40 a.m. ET Friday, the aerospace giant's stock is down 2.9%, bringing losses for the past two days past 6%. But why?

Yesterday, Delta Air Lines (NYSE: DAL) told investors on its morning quarterly conference call that the airline intends to "minimize" any tariffs it might have to pay under President Donald Trump's on-again, off-again "reciprocal tariffs" initiative. Said Delta CEO Ed Bastian: "The one thing that you need to know we're very clear on is that we will not be paying tariffs on any aircraft deliveries we take. ... we've been clear with Airbus on that, and we'll work through and see what happens from that."

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Reading between the lines

Now, you might think that's not really Delta's decision to make. The way tariffs work at a basic level is, the U.S. government sets a tariff rate on goods (like airplanes) imported from abroad. And then whoever imports those goods (like Delta) pays the tariff. Except Delta seems to be saying this is not going to happen, and the question then becomes, if Delta isn't paying the tariffs, then who is?

And the implication is that Airbus will have to pay the tariffs.

Either that, or Delta won't be buying the planes from Airbus. It might shop Boeing (NYSE: BA) instead.

Is it time to sell Airbus?

And now you can understand why Airbus investors are feeling a bit nervous for another day that their company may start losing airplane sales.

Don't get me wrong. That may happen. That may be a risk. Airbus builds planes primarily in Europe, after all, and Europe-built planes would be subject to tariffs, so those sales seem at-risk. However, Airbus does assemble some of its most popular A320 and A220 airplanes right here in the U.S. as well, and those planes should dodge tariffs easily. That may even be what Delta was referring to, that in order to avoid paying tariffs, it will still buy A320s from Airbus, and buy only its bigger aircraft from Boeing.

It's still not great news for Airbus, true. But it's not a total loss, and Airbus investors don't need to panic just yet.

Should you invest $1,000 in Airbus SE right now?

Before you buy stock in Airbus SE, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Airbus SE wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,779!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $659,306!*

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.