Boeing is one of the largest aerospace and defense companies in the world, and understanding what Boeing does is a natural starting point for anyone researching the stock (ticker: BA). The company builds commercial airplanes, manufactures defense and space systems, and provides aftermarket services. Its revenue comes from a mix of government contracts and airline customers, and its business model carries unique risks worth examining before you dig deeper.
Key takeaways
- Boeing operates across three main business segments: Commercial Airplanes, Defense/Space/Security, and Global Services.
- Airlines and governments are Boeing's two largest customer groups, each creating different revenue dynamics.
- The company's backlog of orders is one of the biggest in the industry, but backlogs don't guarantee smooth delivery or profitability.
- Boeing's defense business provides steadier revenue compared to the boom-and-bust cycles of commercial aircraft.
- Aftermarket services (maintenance, parts, upgrades) generate recurring revenue that many investors overlook.
What does Boeing do? A plain-English breakdown
At its core, Boeing designs, builds, and sells airplanes and defense systems. If you've flown on a 737 or a 787 Dreamliner, you've been inside a Boeing product. But the company is more than a planemaker. It also builds military aircraft, satellites, missiles, and rotorcraft for governments around the world. And it runs a large services division that handles maintenance, training, spare parts, and upgrades for both commercial and military customers.
Think of Boeing as three businesses under one roof. Each has different customers, different margins, and different risk profiles. That matters when you're trying to understand what drives BA's revenue and where things can go wrong.
Backlog: The total value of orders a company has received but hasn't yet delivered. For Boeing, this number often runs into the hundreds of billions of dollars. A large backlog signals future revenue, but execution risk (delays, cost overruns, quality issues) can erode its value.
How does Boeing make money?
Boeing's revenue comes from three segments, and each one works differently.
Commercial Airplanes
This is the segment most people picture when they think of Boeing. The company sells narrow-body jets (like the 737 family) and wide-body jets (like the 787 and 777) to airlines worldwide. Aircraft orders are typically placed years in advance, and Boeing recognizes revenue as planes are delivered. Pricing on a single commercial jet can range from roughly $80 million to well over $400 million depending on the model and configuration.
Here's what makes this segment tricky: it's cyclical. Airlines order aggressively when travel demand is strong and pull back when it isn't. Production ramp-ups are expensive and slow, so timing mismatches between demand and delivery capacity can squeeze margins hard.
Defense, Space, and Security
Boeing builds fighter jets, military helicopters, tankers, satellites, and missile defense systems for the U.S. Department of Defense and allied governments. Revenue here is more predictable because government contracts often span multiple years, but profit margins can be thin. Fixed-price contracts in particular can become money-losers if costs run over budget, and Boeing has experienced exactly that on several programs.
Global Services
This is the segment that quietly generates steady cash. Boeing provides parts, maintenance, pilot training, and digital analytics tools to both commercial airlines and military customers. Because aircraft have lifespans of 20 to 30 years, the aftermarket opportunity is enormous. Services revenue tends to be more stable and higher-margin than selling new aircraft.
Fixed-price contract: A deal where the manufacturer agrees to deliver a product at a set price, regardless of what it actually costs to build. If production costs rise, the manufacturer absorbs the loss. Boeing's defense division has taken significant charges on several fixed-price programs.
Who are Boeing's main customers?
Boeing's customer base falls into two big buckets, and understanding both helps explain why BA behaves the way it does.
Commercial airlines make up the first bucket. Think of carriers like United, Ryanair, Emirates, and dozens of others globally. These customers drive the Commercial Airplanes segment. Demand depends on passenger traffic growth, fleet age, fuel prices, and airline profitability. When airlines are flush with cash and passenger traffic is rising, orders pile up. When the travel industry stumbles, order deferrals and cancellations follow.
Governments and militaries make up the second bucket. The U.S. government is Boeing's single largest defense customer, but the company also sells to allied nations through foreign military sales programs. Government budgets are set through political processes, so defense revenue is shaped by geopolitics, congressional appropriations, and long-term strategic priorities rather than economic cycles.
What's interesting is how these two customer groups partially offset each other. Commercial demand tends to follow the economy, while defense spending follows its own logic. That diversification doesn't eliminate risk, but it does smooth things out somewhat.
What makes Boeing different from its competitors?
The commercial aerospace market is essentially a duopoly. Boeing and Airbus are the only two companies capable of building large commercial jets at scale. That's a huge barrier to entry. Building a commercial aircraft program costs tens of billions of dollars, requires decades of regulatory certification experience, and demands a global supply chain that takes years to assemble.
This duopoly means Boeing doesn't face the same competitive pressure as companies in, say, consumer tech. Airlines that need new planes are essentially choosing between Boeing and Airbus. That said, Airbus has gained market share in the narrow-body segment, and Boeing's quality and delivery challenges have given airlines reason to look harder at the competition.
On the defense side, Boeing competes with Lockheed Martin, Northrop Grumman, Raytheon Technologies, and others. This market is more fragmented, and contract wins often depend on relationships with government procurement officials, past performance, and political factors as much as technical capability.
If you want to compare how BA stacks up in terms of financials and competitive positioning, the Boeing stock research page on Rallies.ai is a good place to start pulling data.
What are the biggest risks for Boeing investors?
No Boeing for beginners guide would be complete without talking about risk, and BA carries more of it than a lot of large-cap industrial stocks. Here's what to watch:
- Execution and quality risk. Boeing has faced high-profile production and quality control problems. Manufacturing defects, delivery slowdowns, and regulatory scrutiny can delay revenue recognition and increase costs. For a company that depends on building complex machines safely, quality failures have outsized consequences.
- Debt load. Boeing carries a significant amount of debt. When production slows or halts, cash flow drops while interest payments continue. Investors researching BA should look carefully at the balance sheet and free cash flow trends to understand how much financial flexibility the company has.
- Regulatory exposure. The FAA and international aviation regulators can ground aircraft, limit production rates, and require costly modifications. Regulatory actions are hard to predict and can drag on for extended periods.
- Supply chain fragility. Boeing relies on thousands of suppliers. Disruptions anywhere in that chain (labor shortages, parts delays, quality escapes from subcontractors) can slow production and increase costs.
- Cyclical demand. Commercial aviation tracks economic health. Recessions, pandemics, and fuel price spikes all reduce airline orders and deliveries.
Free cash flow: The cash a company generates from operations minus capital expenditures. For Boeing, free cash flow is one of the most closely watched metrics because it shows whether the company is actually converting its massive backlog into real money. You can track this metric using tools like the Rallies.ai Vibe Screener.
How to start researching BA as a beginner
If you're new to aerospace investing and want to dig deeper into Boeing, here's a practical sequence that avoids information overload:
- Understand the segments. Read Boeing's most recent annual report (10-K) and look at how revenue and operating income break down across Commercial Airplanes, Defense/Space/Security, and Global Services. The mix tells you where the money actually comes from.
- Watch delivery numbers. Boeing reports monthly aircraft deliveries. This is the single best real-time indicator of commercial segment health. More deliveries generally mean more cash coming in.
- Check the backlog. A growing backlog suggests future demand, but look at order cancellations and deferrals too. Net orders (new orders minus cancellations) give a cleaner picture.
- Look at free cash flow, not just earnings. Boeing's accounting can be complicated due to program accounting methods. Free cash flow cuts through some of that complexity.
- Track the competitive dynamic with Airbus. Market share shifts between the two companies tell you a lot about which direction momentum is heading.
You can run this kind of research quickly using the Rallies AI Research Assistant, which lets you ask plain-English questions about any public company and get structured answers backed by financial data.
Try it yourself
Want to run this kind of analysis on your own? Copy any of these prompts and paste them into the Rallies AI Research Assistant:
- Explain Boeing's business model like I'm new to aerospace investing — how do they make money, who are their main customers, and what are the biggest risks I should understand about BA before researching further?
- Explain what Boeing does like I'm new to investing — how does the business work and why does it matter?
- Break down Boeing's three business segments and tell me which one generates the most stable cash flow and why.
Frequently asked questions
What is BA in the stock market?
BA is the ticker symbol for The Boeing Company on the New York Stock Exchange. When investors reference BA, they're talking about Boeing's publicly traded shares. The stock is part of the Dow Jones Industrial Average, which means it's one of 30 large-cap companies used to gauge the broader U.S. stock market.
Is Boeing only an airplane company?
No. While Boeing is best known for commercial jets, a significant portion of its revenue comes from defense and space programs, including military aircraft, satellites, and weapons systems. It also runs a global services business that handles maintenance, training, and parts. Treating Boeing as "just a planemaker" misses roughly half the picture.
What does Boeing do in the defense sector?
Boeing builds fighter jets (like the F/A-18 Super Hornet), military rotorcraft (like the Apache and Chinook helicopters), tanker aircraft, satellite systems, and missile defense components. It competes for contracts from the U.S. Department of Defense and allied governments. Defense revenue is generally steadier than commercial aviation revenue but can carry margin risk on fixed-price programs.
How does Boeing compare to Airbus?
Boeing and Airbus are the only two companies producing large commercial aircraft at scale. Airbus is headquartered in Europe; Boeing is based in the U.S. They compete head-to-head in both narrow-body and wide-body markets. The competitive dynamic between them shifts based on delivery execution, order momentum, and product development timelines. Investors often watch both companies to understand the health of the commercial aerospace industry.
What should beginners know before researching BA?
Boeing for beginners comes down to three things: understand that the company has three distinct business segments, know that free cash flow matters more than headline earnings for this particular stock, and recognize that aerospace is a long-cycle industry where problems and recoveries both play out over years, not quarters. Start with the business model before jumping into valuation metrics.
Where can I find more information about Boeing's stock?
You can start with Boeing's investor relations page for official filings and earnings reports. For a more interactive research experience, the BA page on Rallies.ai gives you AI-powered analysis, financial data, and the ability to ask follow-up questions about anything you find. The Rallies.ai news feed can also help you track developments across the aerospace sector.
Bottom line
Understanding what Boeing does is the first step toward deciding whether BA deserves a spot on your research list. The company is a commercial aviation giant, a major defense contractor, and a services provider rolled into one, and each piece carries its own opportunities and risks. That complexity is exactly why Boeing attracts so much investor attention.
If you want to keep learning about how to analyze individual companies like Boeing, explore more stock analysis guides or pull up BA directly in the Rallies AI Research Assistant to ask your own questions.
Disclaimer: This article is for educational and informational purposes only. It does not constitute investment advice, financial advice, trading advice, or any other type of advice. Rallies.ai does not recommend that any security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. All investments involve risk, including the possible loss of principal. Past performance does not guarantee future results. Before making any investment decision, consult with a qualified financial advisor and conduct your own research.
Written by Gav Blaxberg, CEO of WOLF Financial and Co-Founder of Rallies.ai.
