In this podcast, Motley Fool analyst Tim Beyers and contributor Lou Whiteman discuss:
- More AI-fueled earnings from Micron.
- Changes at the Fed?
- The Paris Air Show's big reveals
- Debating the better stock: Boeing or Airbus?
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A full transcript is below.
This podcast was recorded on June 26, 2025.
Tim Beyers: Will innovations from the Paris Air Show be enough to lift airlines to new heights? You're listening. Motley Fool Money. I'm Tim Beyers here with Lou Whiteman, Lou. How are you? Fully caffeinated?
Lou Whiteman: At least partially caffeinated. Hopefully, that's good enough.
Tim Beyers: I mean, I'm fully caffeinated, ready to go. Let's get into it. We had some news straight off the top. President Trump preparing to a possible nominee to replace Fed Chairman Jerome Powell. This is, according to the Wall Street Journal, the president could announce his choice for a successor as early as this summer, and this is despite Powell still having 11 months remaining in his term. Look out. I don't know. We'll see here, Lou. Then Micron, reporting really strong fiscal Q3 earnings. Stock was up 1.5% roughly in pre market trading. Overall revenue jumped. 15.5% sequentially, 36.6% year over year to 9.3 billion. Looks like they're on track for 10.5 billion next quarter. No shocker here, Lou. AI is a thing and is still a thing.
Lou Whiteman: It seems to be doing all right for Micron.
Tim Beyers: Palantir teaming to build AI software for building nuclear plants. This is a partnership with a nuclear company will result in a new software system, I should say, called NOS, the nuclear operating system. Honestly, I get fast and furious vibes on this one, when I hear NOS I think, like, cars going really, really fast. Then, finally, Mark Zuckerberg is continuing his AI recruiting press, landing three OpenAI researchers in the latest round. Here, he's spending loads of money. Lucas Beyer, Alexander Kolesnikov and Xiaohua Zhai have all joined Meta for Zuck's super intelligence effort. All three had set up the Zurich office of OpenAI just last year, Lou. I mean, have you gotten an offer from Mark Zuckerberg, Lou?
Lou Whiteman: I haven't, but hearing what they've been quoting, I really wish I would. I'll say this. Sam Altman, the CEO of Open I, he telegraphed this, and look, we need a good feud. We need a good rivalry. I'm all for this. Let's let this happen. This could be fun.
Tim Beyers: There you go. The Lakers/Celtics of the AI world, Meta versus OpenAI. We love it. Let's move on to the Paris Air Show, Lou, which is an area of your expertise. I want to talk about the CFM rise engine. This was something I thought was absolutely fascinating because to me, this looks like a prop engine because essentially you take away the nisel. You have a prop engine, but is running like a jet and apparently has 20% fuel efficiency. Tell me, what is this thing? I mean, is this a thing that saves airlines? I saves them a bunch of money?
Lou Whiteman: Maybe. It's definitely real. The question is, if and when it's practical. The idea has been around for decades. It goes back to the 1970s, the oil crisis. But composite materials are better. We've made other advancements, so it is getting toward realistic. There are downsides. The nitrous engine would we need to rethink aircraft design. There's a lot of safety considerations, weight considerations. Pratt and Whitney, the RTX company, one of the rivals here. They seem to think they'd be better off just getting efficiency gains by refining their geared turbofan than not doing something new. But hey, the manufacturer, CFM. That's GE space and Safran. It's a joint venture. They really hope to commercialize this by early 2030s, TBD, but it's really cool looking. I'm with you. I'd love to see it on an airplane.
Tim Beyers: I mean, it's some of the concept designs look really fascinating. Moving on to Rolls Royce, Riyadh Airlines has chosen to outfit its Airbus 350 aircraft with Rolls Royce engines. I remember seeing Rolls Royce engines on DC three aircraft when I was flying back when I was a kid. How big a player today is Rolls Royce in the commercial air market? Because this stock is trading near the CSBA 52 week high. So tell me, are you a buyer here? Is this a big deal?
Lou Whiteman: They're a decent third, but they are definitely third. GEAR space has more than half of the market, including that joint venture we just mentioned. Pratt and Whitney is also ahead of Rolls Royce. Look, Rolls Royce, by the way, they don't make the cars anymore. Don't think about it like that. But it's a quality manufacturer, but they are limited. They only make engines for these big wide body jets, like the A 350 and the Dreamliner, the 777. That's a small part of the overall market, less than 40% of the global fleet, and it's growing at a slower pace. So that means from the business point of view, a lot less spare part sales, a lot less servicing revenue over the lifetime in the engine. Overall, do I like the stock? Look, it's a well diversified company. European aerospace stocks have gotten a lot of attention for good reasons. It's a double right now. I don't know if I'd be jumping in right now, but look, they should have good tailwinds, pardon top. There should be they're set up nice to perform from here.
Tim Beyers: I mean, we like tailwinds, Lou. Tailwinds good.
Lou Whiteman: We need tailwinds.
Tim Beyers: Textron. Let's talk about Textron here. Having been to Hawaii more than a few times, I am a big fan of the King Air platform. Those are little planes that I have flown between islands. They're inter island planes, and they're fantastic. I love them. It looks like there's a new multi mission version of the Beechcraft King Air. Let's talk a little bit more about this. Honestly, Textron, you know, Ticker TXT, this is a stock that we don't talk about very much. Does it deserve a little bit more love from investors?
Lou Whiteman: I think it probably does, but in fairness to investors, Textron has made themselves a tough company to love in recent years. [laughs] I don't know if it's all our fault. Textron is one of the last great industrial conglomerates. Aviation, as you mentioned, the Beechcraft, but also Cessna business jets. They own bell helicopters, Jacobson lawnmowers. They make golf carts. They make all sorts of things. For a while, every quarter, it seemed inevitably one of those businesses just laidn egg. Earnings followed, and it has just been a lot of one after the other. In fairness, though, they've done a lot better of late. We're entering a big refresh cycle on business jets. All those CEOs that got shamed in 2008 and held off on buying new business jets, those are finally coming due for replacement. Cessna, there's, again, tailwinds there. Bell Helicopter just won a big competition to replace the Black Hawk helicopter. By the way, they'll be using Rolls Royce engines for that, too. That's another thing for Rolls Royce. Look, Textron, they traded a discount to most big Aerospace names. I think they are set up well for at least some of their most important businesses like Bell and Cessna to outperform. If not, I don't know if I'm rooting for this, but this is a conglomerate in an age where a lot of breakups. If they don't catch up with that multiple Tim, I can really see an activist coming in and start looking for ways to do to them what we've done to GE or so many others.
Tim Beyers: I mean, that would be interesting. Up next, which is the better stock that we saw at the Paris Air Show? Is it Boeing? Where is it Airbus? Lou, let's talk about which is the better stock here. Boeing had I think it's fair to say Boeing has had a rough maybe three years, but in particular, it's had a past, really bad couple of weeks, real heartbreaking tragedy with the Air India crash of the 787 Dreamliner here. Airbus, as the European competitor, I mean, we've often talked about this. This is the commercial aircraft duopoly. They came out of the Paris Airshow with some deals in hand. Tell me what you think here. Who did it better? It's the who war it best of the Paris Air Show here. Is it Boeing or is it Airbus?
Lou Whiteman: Normally, these are huge PR events where Boeing and Airbus will trumpet all the orders they have. But as you say, with the Air India crash, both Boeing and GE Aerospace stayed on the sideline. It was a sober show the we didn't see all the announcements. We can count planes, though, and know how they're doing. Boeing's actually outperforming Airbus for the year, and they may be on track 4,000 or so orders, which would be really, really good because, you said I'd actually say it's been a tough decade for Boeing almost now. I do hope they're on the upswing. They're still under regulatory restrictions on how many planes they can produce. That's stemming from the 737 Max tragedies and all the fallout from that. That's important because back when COVID hit, they basically mortgaged every piece of equipment they could find. I mean, Tim, they were taking the staplers off of the desk of the finance department and saying, What can we get for this?
It was probably a good move because they didn't know what was coming and they needed to just make sure they had the cash to survive. But today, Boeing has 50 billion or so of debt, up from, say, 10 billion in 2018. They need to bring that down, and the way you bring that down is by selling more airplanes and generating the cash flow. I think investors need to understand that even if it all goes perfect from here, we are still years away from Boeing just getting back to normal. Patience is needed, and Airbus is definitely then a cleaner story. But hey, look, this is maybe the greatest commercial aircraft cycle we have ever seen in the history of the business. Between Airbus and Boeing, the backlog is almost 13,000 planes. That's well into the 2030s. If you are patient and you do believe that the worst is behind it, there's a pretty compelling case for Boeing to make gains as the balance sheet heals and as they just get back to normal in the face of all this demand.
Tim Beyers: I mean, you bring up a really interesting point here that that backlog is absolutely extraordinary. There are years of what you would hope is predictable cash flow here. But we do have this tragedy, and that is going to be yet another black mark on Boeing's record. Meanwhile, Airbus continues to do, I mean, relatively well. The A 320 platform, the A 320 Neo platform has been solid for quite some time, and it looks like that will continue to be solid for a while. What do you need to see, if anything, from Boeing in its response to the Air India tragedy that they haven't already done. Is there anything?
Lou Whiteman: I think Boeing is doing what they need to do. I mean, we will see it takes months if not longer to figure out what happened. We will see, it's all speculation right now. If it is a material design flaw, I think that that would be material for investors. The Dreamliner has flown for 25 years.
Tim Beyers: That's amazing, isn't it?
Lou Whiteman: Yeah. Well, and this is an interesting point, too, not to sidetrack, but one of my biggest fears about Boeing long-term is that's their last clean sheet design. They have not sat down a group of engineers in a room and designed a plane since the Dreamliner. They're in no position to do it now. But eventually they really need that mid market, that 757 replacement now. They need to at some point. Tim, people retire. By the time they do a clean sheet, it's going to be all a group of people that basically don't have that institutional memory. I mean, that, to me, is scary. I think, hopefully with Air India, it was a tragedy No, whoever whatever the finger pointing ends up, but I do think that this is on course to be a more typical tragedy with this, and it shouldn't don't think stunt the turnaround, but, I mean, we're talking years for this turnaround, anyway. There is a lot that can just go wrong in the business cycle and all things that I think investors need to get keep in mind before they just get too excited.
Tim Beyers: Up next. A little trivia. Little Airline Trivia. You're listening to Motley Fool Money. Lou, we've got a little Trivia game that I want to play with you and all of our listeners here. Get your guess in. We would love to see what you guessed in leave a comment below in whatever wherever you listen to your podcast, just let us know what your guess was. But, Lou, you're a long time follower of this industry, and I know you've got some real history related to this question. Let's talk about it. My question for you is, how many towers help guide aircraft across the United States airspace? Is it more or less than 550?
Lou Whiteman: See, 550 seems so specific there, and I thank Tim that you're playing a game with me here, which you're in my head. [inaudible]
Tim Beyers: I never do that. I would never try to trick you, Lou. No, go ahead. Keep going.
Lou Whiteman: I will say in your part of the world, you can still see, like, the way we did it before when we actually when we first started aviation, when we put huge giant arrows in the ground, so the pilots could see those from the ground. I think 550 is close. I'd probably go over, but I don't know. It feels really close to 550. If it's exactly 550, I'm going to be annoyed with you.
Tim Beyers: It is over. It's 648. It's 648. You got that right. The reason I wanted to kick this off and as we close down the show here, just a quick conversation about the long-term opportunity here. The way that we manage air traffic here in the United States is ancient. Lou, any thoughts about what is the investing opportunity here? Because you would think after a while, I mean, surely, we're going to get to the point where we're using satellites. We're going to use more advanced technology to route planes more efficiently. Right now, we route planes according to where the towers are, not the fastest route. That is striking, so your thoughts on this, Lou, before we close up today's show.
Lou Whiteman: Now, definitely. I mean, we're using Windows 95 and in some cases, DOS systems, which I'm old enough to remember that, but not to enjoy it. Look, I was telling you that I was actually in 2001, I was at a hearing where they were talking about just this modernizing air traffic control. I'm pretty sure most I'd have to find my notes, but we are still in that process. It is happening. It's slow, it's expensive. It's behind schedule. But if you think about this, 5, 9, at least. You need redundancies. You need to get it just right. You can't shut down the air system for six months to do a clean reboot. It's just a really complicated problem. Satellites are part of the issue. I don't think that it's just a clear one vendor thing. There's a lot of companies from L3Harris to Leidos and some of the contractors that are involved. But really, it isn't so much of a huge government boondoggle project. It's just in a million different places, back filling, digging through, trying to figure it out, it is just a tedious slow process that requires a ton of funding, and those tend to be nightmares when annual government budgets come around, so we'll get there. It's just really hard.
Tim Beyers: A Rule Breaker opportunity to come? We'll see. But it hasn't happened yet, but we're going to keep an eye on it. Lou, thanks for being here.
Lou Whiteman: Always a pleasure.
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Thanks for listening Fools. I'm Tim Beyers, for Lou Whiteman. Dan Boyd is our engineer. We will see you again next time. Move on.
