Boeing delays 777X again as investors eye Fed easing cycle

Boeing shares fell after the company delayed its 777X aircraft yet again, adding billions more in charges and extending the program’s setbacks to seven years. The planemaker’s latest quarter underscored both its production challenges and its growing backlog of aircraft orders, now valued at about US$100 billion.

BNN Bloomberg spoke with Justus Parmar, founder and CEO of Fortuna Investments, who said Boeing’s long-term fundamentals remain supported by government backing and robust demand. He also discussed the U.S. Federal Reserve’s rate cuts, the strength of the American economy and his outlook on artificial intelligence and long-term investing.

Key Takeaways

• Boeing delayed its 777X jet by another year and recorded a US$4.9-billion charge, bringing total program costs to nearly US$16 billion.
• CEO Kelly Ortberg is credited for stabilizing operations and securing new aircraft orders from the Middle East.
• The company’s backlog now exceeds US$100 billion, signalling strong global demand despite delivery setbacks.
• Justus Parmar expects further U.S. rate cuts, predicting the federal funds rate could drop by a full percentage point in 2025.
• Parmar remains bullish on long-term growth in both AI and American manufacturing as easing rates attract record foreign investment.

Read the full transcript below:

MERELLA: Shares of Boeing are under pressure today. Airplane sales are surging, but Boeing is again delaying the release of its 777X model. It’s now seven years behind schedule, with almost US$16 billion in total charges. Justus Parmar, founder and CEO of Fortuna Investments, joins us now to talk about this. Thanks for joining us today.

JUSTUS: Merella, so nice to see you again.

MERELLA: Is it certification that’s dragging out the process?

JUSTUS: Well, I mean, it’s a couple of things. I would preface it by saying that Kelly Ortberg, the new-ish CEO — I think he’s been at the helm for maybe a year or so — inherited quite the mess. And I would say he’s done a great job given what he walked into. I think that’s reflected in the stock chart you just showed — year to date, the stock is up. Airlines are a very tricky industry, and I think Kelly has done a relatively good job navigating that. The stock is up year to date. They’ve obviously had a big miss this quarter, but that was largely due to the delay in delivery of some of these planes.

MERELLA: Okay, so it’s also accrued almost US$16 billion in charges. Is that unusual — that amount of charges?

JUSTUS: Well, it’s not a small number, whatever way you cut it. I think the important data to look at in the quarterlies is the free cash flow — that’s up. The other line item that really sticks out to me isn’t necessarily the $16 billion, it’s the $100 billion. That’s the current backlog of interest from people looking to buy aircraft.

And I think that’s largely due to the fact that when the current U.S. president came into power, he was originally very anti-Boeing. He was publicly critical in the media about his own aircraft order from his first administration that was backlogged and not yet delivered. So investors were cautious, wondering which way this company was going to go, because you don’t want to be in the president’s crosshairs — as I’m sure we all know as Canadians.

But Kelly Ortberg was able to navigate out of that. He also convinced the administration and the president to help secure new orders in Saudi Arabia and the Middle East, and that accounts for a lot of that $100-billion backlog. So yes, you can dissect some of these numbers in the current quarter, but I think fundamentally the company is in relatively good shape over the long term because of the administration’s support and that $100-billion order book.

MERELLA: Okay, let’s get to the Federal Reserve rate cut today. Is it still labour that’s driving this, from what you heard from Jerome Powell?

JUSTUS: A couple of things. I’m not the only person saying this, but I think he was too late in bringing rates down. They were artificially high for way too long. Now we’re finally seeing that easing cycle — rates are starting to come down. I think we’re going to see at least one more cut relatively soon. I predict that next year we’ll see a full percentage-point cut.

That’s tremendously strong for the American economy because it’s booming right now. The stock market is at all-time highs. Corporations, including Boeing — with the exception of maybe today’s print — are doing very well. There’s about US$20 trillion worth of investment coming into the country, so the setup is fantastic.

The only thing that was a little off was the delay in rate cuts, and I think the answer now is unequivocally yes — rates are coming down. That will allow American consumers to borrow more at lower rates, and it will also help with the US$37 trillion of debt on the balance sheet. It’s actually the perfect setup and will be a great stimulant for the economy.

And, Merella, I don’t know if you saw it, but the last GDP print in the U.S. was about 3.8 or 3.9 per cent — that’s outstanding. If America can grow at that rate moving forward, that $37 trillion in debt won’t matter as much.

MERELLA: Okay, I do want to get you on AI, which is driving much of the market growth. Nvidia hit US$5 trillion in valuation only a few months after reaching US$4 trillion. Are we in a bubble for AI?

JUSTUS: It depends on how you look at it. If you’re trading it, maybe sort of. But we’re fundamental, long-term investors at Fortuna — we look at asset classes strategically and invest for the long haul. I don’t think so.

It’s extremely expensive — it’s obviously the most expensive company on the planet. I was asked on this program earlier this year what I thought of Nvidia when it was trading around US$100 or US$110. It’s a one-of-one company. I don’t think anyone in their right mind believes AI isn’t the future. Nvidia is unequivocally the leader.

I’m not saying go buy it at the all-time high today — I’d recommend waiting for pullbacks. But if you believe in AI and in Jensen Huang — the “godfather of AI” — he’s built a huge moat around that business. They’re doing US$100 billion in cash flow. Think about that — US$100 billion in cash flow, and nobody can keep up.

Statistically, if a company gets such a head start the way Nvidia has, it’s very hard for these generational companies — Microsoft, Tesla, Amazon, Meta — to fail. They’ve got a lot working in their favour. I’m not talking about trading — I’m talking about long-term investing.

MERELLA: All right, Justus, I have to leave it there. I’m out of time. Thanks for your time today.

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This BNN Bloomberg summary and transcript of the Oct. 29, 2025 interview with Justus Parmar are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.