Shares of GE Aerospace jumped +5.6% to $302.74 on May 6, extending a rally that began after the company signed an engine supply deal with Turkish Aerospace Industries and continued to benefit from an expanded AI partnership with Palantir. The two-day gain of nearly 8% from Friday's close of $280.52 pushes GE's market cap back above $300 billion — but the stock still sits 13% below its February all-time high of $348.48, leaving investors debating whether the recovery has legs.
A Military Engine Contract Adds to an Already Record Backlog. The TAI deal covers supply of F404 turbofan engines for Turkey's Hurjet jet trainer and light attack aircraft, plus maintenance, repair, and overhaul cooperation.
TAI is buying 100 F404 engines for the program.
Aircraft powered by the F404 are in service or on order with 16 countries , meaning each new platform win seeds decades of aftermarket spare-parts revenue. This contract layers onto a backlog that already exceeds $210 billion after Q1 orders surged 87%.
An AI Bet Targets the Factory Floor, Not Just Buzzwords. GE and Palantir expanded their multi-year partnership to roll out AI tools across military aviation maintenance and GE's broader production system, aiming to improve supply chain visibility and predict failures. The real test is financial: whether GE can ease supply chain and production bottlenecks without sacrificing margins.
GE plans to invest $1 billion in its U.S. manufacturing footprint in 2026 , and AI-driven scheduling is supposed to help that spending translate into faster output, not just higher costs.
Strong Earnings, But Margin Pressure Lurks Underneath. GE reported Q1 earnings of $1.86 per share, beating the $1.60 consensus, on revenue of $11.61 billion — up 24.6% year over year. Yet GE also reported a 2% decline in GAAP profit and a 490-basis-point compression in its profit margin (meaning profit as a percentage of revenue shrank notably), suggesting costs are rising alongside sales. Full-year guidance sits at $7.10–$7.40 earnings per share , and management warned of headwinds from jet fuel costs and Middle East conflict disrupting roughly 5% of global air departures.
Valuation Leaves Little Room for Error. At roughly 35 times trailing earnings, GE trades above the broader market's average of about 17 times , though it is in line with aerospace peers. Analysts carry a median price target of about $350 , implying ~16% upside — but only if engine production ramps smoothly and geopolitical turbulence doesn't ground airline spending plans.