What Are Boeing Stock Bears Missing?
One business stands out at Boeing (BA): the fighter jets, missiles, and tankers it builds for the military, and the bears may be missing it. You probably still think of Boeing as the 737 maker, but the Navy chose Boeing to build its next fighter. Yet the stock has lost 10.9% in twelve months, while the S&P 500 gained 16.0%. That is the contradiction. So how big is Boeing’s defense business?
Defense Was About 30% Of Boeing’s Second-Quarter Revenue
The defense unit brought in $7.5 billion of Boeing’s $24.6 billion in revenue in the second quarter of fiscal 2026. That revenue grew 13% from a year earlier, against 8% for the company as a whole. Management said on the July 28, 2026 call that the growth came mainly from higher volume, including classified programs, missiles and weapons, and the KC-46A Tanker. It also said demand for missiles, munitions, and secure communications satellites remains very strong.
More work has arrived since then. On September 29, 2026, the Navy awarded Boeing the contract to develop the F/A-XX, its next-generation fighter. The development phase alone is worth more than $20 billion, a large sum besides the $85 billion defense backlog Boeing reported for the second quarter.
Why Does Defense Matter For Boeing Stock Now?
It matters because the recent worries about Boeing are about its passenger jets, and defense is a separate line of work. Shares slid on September 16, 2026, when management said the 737 Max line was taking longer than expected to stabilize at 47 jets a month. Then on September 28, the FAA delayed certification of the 737 Max 10 over a software issue. On October 2, though, a review board at the FAA said the issue is not a safety concern. The stock closed October 1 at 23.7% below its 52-week high.
Defense cannot settle those worries alone, though, because passenger jets are still the larger business. The commercial airplane unit brought in $11.8 billion in the second quarter, more than defense, and it ran at an operating loss. Commercial orders also make up $597 billion of Boeing’s $715 billion backlog. So if you hold Boeing stock, you still own a jet maker first, with a growing defense business beside it.
Boeing’s Defense Unit Lost Money In The Second Quarter
The defense unit ran at an operating margin of negative 0.2% in the second quarter, which is a small loss. Boeing added resources to keep one defense program, the VC-25B, on schedule, and took a $280 million charge for it. Without the charge, the margin would have been 3.5%.
Management expects the defense margin to improve. On the July 28 call, it said the margins on its defense backlog are attractive. It also remains confident of returning to high single-digit margins by the end of the decade. That is a forecast, and the charge on one program was enough to wipe out the unit’s profit in the second quarter. A positive defense margin in Boeing’s third-quarter results would show Boeing is starting to keep a profit on defense work. A margin above 3.5% would beat the second quarter even before its charge. Another loss would show it is not there yet.
How To Act On BA?
Now you know BA better. And that’s our purpose: to make you informed before you invest your money. However, making a bet on a single stock carries its own risks.
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