Boeing prioritizes balance sheet as chip earnings test market mood

Boeing is holding off on a new aircraft until its finances are stronger, and CNBC’s Investing Club says that discipline is the right message for investors watching the turnaround. The same Monday discussion also carried a warning for earnings season: in chips, good numbers may still get met with selling.

Boeing shares fell more than 2% after CEO Kelly Ortberg told CNBC that the company is focused on repairing its balance sheet before starting work on a new plane. A balance sheet is the snapshot of a company’s financial position, including its cash, debt and other obligations.

Jeff Marks, portfolio director for the CNBC Investing Club with Jim Cramer, said Boeing’s choice to wait was appropriate. Cramer said the comment showed management is putting execution and production of existing aircraft ahead of rushing another jet into development.

For retail investors, that distinction matters. A new airplane program can take years and require heavy spending before it produces revenue. Boeing is still being judged on whether it can stabilize operations, raise output and improve confidence in the planes it already sells.

Cramer described aerospace as a favorable long-term area, according to the Club, while pointing to the Middle East conflict as a near-term drag. He said the war is why the setup is not stronger at the moment, adding that he thinks the conflict will run its course.

Intel’s report will test chip-stock patience

The Investing Club also looked ahead to Intel’s earnings report, due after Thursday’s market close. Intel is a Club holding, and investors are waiting for updates on three areas: the central processing unit business, third-party foundry operations and advanced packaging.

A central processing unit, or CPU, is the main chip that runs a computer’s core tasks. A foundry makes chips for other companies. Advanced packaging refers to methods of combining chips or chip components so they can work more efficiently together.

Cramer said he expects Intel to post an “excellent” quarter. He also cautioned that a strong report may not translate into an immediate gain for the stock in the current market.

Marks cited Taiwan Semiconductor Manufacturing Co.’s recent decline after earnings as an example of the pressure on semiconductor names even when business trends look healthy. Cramer said that kind of reaction would not be an unusual expectation for Intel.

Semiconductors rebound, but volatility stays in focus

Broader trading was mixed Monday, according to the Investing Club recap. Semiconductor stocks bounced after a sharp sell-off the previous week, while oil prices eased after Iranian officials signaled interest in diplomacy despite ongoing U.S. strikes.

The Club also pointed to fresh worries about artificial intelligence competition after Chinese startup Moonshot AI drew attention from investors. Cramer argued that the recent weakness in AI-linked stocks reflected investors raising cash rather than a change in the long-term AI thesis.

“It doesn’t matter what you think; it matters what they think,” Cramer said, describing the move as investors saying they needed money and were getting out. He called it an unwind, a term for investors reducing positions that had previously built up.

Cramer said investors who still like those stocks over the long run should be ready for swings during the day. The Club’s rapid-fire segment also covered Yeti, SpaceX, Domino’s and Charles Schwab.

CNBC disclosed that Cramer’s Charitable Trust is long Boeing and Intel. The Investing Club says subscribers receive trade alerts before Cramer trades for the trust, with waiting periods before any transaction is executed.

This story draws on original reporting from CNBC.