BREAKINGVIEWS-Why a US investment in Boeing would make sense

By Pranav Kiran

TORONTO, Dec 31 (Reuters Breakingviews) - For Uncle Sam’s foray into state capitalism, the sky’s the limit. President Donald Trump’s administration has cut a string of deals to take stakes in companies key to national security and the supply chain. In 2026, the White House will settle on its obvious next target: plane-maker Boeing BA.N.

The United States government is the ultimate strategic investor. Trump has leaned on its vast regulatory and financial might to negotiate governance agreements or outright take stakes in the steel, semiconductor, rare earth mineral, lithium and nuclear power industries. The frenzy of negotiations ramped up after China began blocking key mineral exports. Treasury Secretary Scott Bessent is signaling that there’s plenty of dry powder left.

A 9.9% stake in chipmaker Intel INTC.O signifies the importance of the closest thing the country has to a cutting-edge semiconductor maker. Its long-ailing status as it slips behind rival Taiwan Semiconductor Manufacturing Co (TSMC) 2330.TW puts it squarely in the White House’s crosshairs. The same logic readily applies to Boeing. It is one half of a global commercial-aircraft duopoly, a massive supplier to the military, and the nation’s single largest exporter. It is also reeling from a long series of setbacks related to deadly faults in its aircraft.

Those woes would give the former-banker duo of Commerce Secretary Howard Lutnick and lieutenant Michael Grimes plenty of leverage. The Federal Aviation Administration imposes a limit on how many 737 MAX planes Boeing can make, and determines its autonomy in conducting inspections. Roughly a third of the company’s revenue comes from its defense, space and security segment, which depends on government contracts.

If the White House wants to snag a return to justify the investment, now is an attractive time to move. Wall Street analysts’ price targets over the next 12 months point to a 38% rise in Boeing’s battered stock, according to Visible Alpha data at the end of November 2025. If that happens, the company’s market value would rise by over $50 billion. Better yet, it’s set to return to generating cash flow – and potentially paying dividends – after a heavy round of investment.

Aside from canny dealmaking, geopolitical pressures seem most acute. The German, French and Spanish governments collectively own about a quarter of resurgent rival Airbus AIR.PA. A new competitor also looms: Commercial Aircraft Corporation of China, or Comac. Although the state-owned manufacturer has made less than two dozen C919 planes to date, Western governments may be desperate to avoid the fate of so many other industries, where rising Chinese industrial might has pushed aside domestic champions. Boeing is the best candidate for smoothing out yet more trade turbulence.

This is a Reuters Breakingviews prediction for 2026.