Is Boeing's New 777-9 Plane a Reason to Buy the Stock?

New products are the lifeblood of any company. Think about it this way. Apple consistently refreshes the iPhone while Nvidia frequently updates its lineup of artificial intelligence (AI) semiconductors. Of course, the list goes on.

Though significantly pricier and far less consumer-facing than an iPhone, product launches and upgrades are critical elements in evaluating aerospace stocks, including Boeing (NYSE: BA). Recent history indicates Boeing has a checkered record with safety certifications for new passenger aircraft, something that can weigh on shares of one of the largest industrial companies.

However, Boeing is getting its act together on the safety and production fronts, and those improvements could benefit investors.

777-9 takes flight, and Boeing stock does, too

Financial markets aren't always rational, but they are often fair. Said another way, if a stock such as Boeing falters due to negative headlines about a product launch, as has been the case with the company's 777 commercial aircraft, it's reasonable to expect that when the news is positive, the stock will react in kind.

That's happening with Boeing. On May 7, the first 777-9 aircraft ordered by German carrier Lufthansa completed a test flight with a full interior. The test was a success, and for the week ended May 11, Boeing stock was up 7.6%, confirming that good vibes are flowing for Boeing investors following the 777-9 payoff.

Less experienced investors may be wondering why a simple test flight sent this industrial stock soaring. The reasoning is simple; It's more than just a test flight. Some aviation industry observers see the Lufthansa 777-9 acting as a template of sorts for future Boeing deliveries of that plane.

Second, the successful test flight may imply that Boeing will be able to deliver the 777-9 to its German client later this year, allaying fears that first deliveries may be pushed off until 2027. That's critical, because the 777 is Boeing's largest and most fuel-efficient plane to date, suggesting there's likely strong demand for the product, provided the manufacturer executes on the certification and production fronts.

Boeing may have other catalysts

At the moment, it appears Boeing is in a solid place with the 777-9, and the stock's recent price action confirms that trend. So it's reasonable that investors may be pondering what other near-term catalysts are on the horizon -- in a word: China.

Boeing CEO Kelly Ortberg is a part of a group of American business leaders tabbed to accompany President Donald Trump on an upcoming business summit to China. Sure, get-togethers of this nature can be not much more than glad-handing dog-and-pony shows, but the event could be something different, more material for Boeing.

China hasn't placed a large-scale Boeing order in nearly a decade, but there's speculation it's mulling an order for 500 737 MAX jets. If that order comes to fruition, Boeing stock is likely to take off.

Todd Shriber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Boeing, and Nvidia. The Motley Fool has a disclosure policy.