Boeing's FAA production expansion halt, PayPal AI gets no buzz

Boeing (BA) shares were on the decline on Thursday after the Federal Aviation Administration (FAA) announced a halt on Boeing 747 Max production expansion. While the order means Boeing may continue producing MAX jets at the current monthly rate, they cannot increase that rate until the order is lifted.

Meanwhile, shares of PayPal (PYPL) were also on the decline after the company unveiled new product innovations that will incorporate AI. The announcement is the first from new CEO Alex Chriss, who joined PayPal in September.

Yahoo Finance Anchors Josh Lipton and Julie Hyman break down the latest developments from the companies and what it could mean for them moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

Video transcript

JULIE HYMAN: Shares of Boeing, we've been watching them as well today. Down 6%. The Federal Aviation Administration has ordered a halt of the production expansion of Boeing's 737 MAX aircraft, the whole line. The manufacturing stoppage coming as the 737 MAX 9 fleet remains grounded. Now, something that could be seen as helpful for Boeing here is that the FAA does have now inspection criteria. What does Boeing need to do to get these planes back in the air, the ones that have been grounded?

But the fact that there now can't be this production expansion, obviously hitting the shares in addition to the criticism that I mentioned coming now from American as well as the others.

- Yeah, and that criticism, as you mentioned. I mean, some of it's public. Some of it's been reported. This one today was very public. I mean, this one was American Airlines CEO speaking on another network calling out the quality lapses. We need them to produce a quality product every time, he said. We need them to get their act together. And of course, we've heard these similar frustrations from Alaska, from United, some very out front like these. Others, we're just getting reports about.

But also, it's interesting. It's not just kind of tough talk, Julie. We are-- It's something investors can now measure. I mean, Alaska, for example, is saying today, they're going to incur a $150 million hit from the grounding of the MAX 9. Southwest is saying it doesn't think it will receive the smaller MAX 7 this year, cut the number of aircraft deliveries it expects. So interesting. It's beyond just talk.

JULIE HYMAN: Right. And United, which had ordered some MAX 10s, now is removing those from its plans. It's not incorporating them anymore. Boeing's shares, by the way, are now down some 23% just in 2024.

- Meanwhile, let's look at shares of PayPal. They are in the red today as well. Look at that down about 4%. That's unveiling six new product innovations that will introduce AI into their platform. But the announcement not living up to the hype.

JULIE HYMAN: I mean, I just want to pause for a second. You can see where the announcement hit. They were so excited about this announcement. It came out, and that's what happened to the stock.

- I have so many questions about how this rollout occurred. Because so-- OK. Take a step back. You got a new CEO here, Alex Chris. He was named CEO over the summer. So he tells reporters that the company is going to shock the world.

JULIE HYMAN: Yes.

- Now, those are very strong-- those are fighting words. I mean, you got to-- that's huge. That's going to make a headline. And then we did have this event today. Investors don't seem so shocked, at least in a good way.

JULIE HYMAN: Yeah. I mean, it's not-- I mean, it's all little-- it's sort of small things that are affecting the PayPal platform, right? There's a new checkout process that so people can log out with their face, or fingerprint. OK, that's nice. They're doing a one-click guest checkout system they're calling fast lane. They're adding some stuff to Venmo, profiles for businesses. OK, some new products here. But is it-- it's obviously not-- I don't know exactly what the street was looking for, maybe some more financial targets. But that's not--

- I will say, speaking of the street, you do see some more caution on this name creeping in. And we've talked about it on this show. This name has taken some recent downgrades. I mean, from a few different firms. I mean, concerns about competition you'll hear, or profitability pressure. But the worries have been stacking up. And now, you've got a stock. It is up still about 15% since early November. But listen, we're down a good 25% over the past 12 months here.

JULIE HYMAN: Yeah.