Boeing Flies with Cloud Giants for Digital Transformation

The Boeing Company (NYSE: BA) revealed that it has awarded its billion-dollar cloud computing project by splitting it among the three biggest U.S. cloud computing service providers: Amazon Web Services (AWS) of Amazon.com (AMZN), Microsoft’s Azure (MSFT), and Google’s parent Alphabet (GOOGL). The financial details of the deal were kept under wraps. 

Shares of the aviation, aerospace, and defense technology company declined more than 2% at the close on Wednesday following losses in the broader market on concerns surrounding rising interest rates. 

Details of the Deal  

In the current era of digitization, the aircraft maker aims to digitally transform by moving software applications from data centers into the cloud for airplane designers and software developers. The move is expected to aid the company in addressing quality lapses and production issues, which, in turn, will help in the reduction of costs. 

Particularly, hundreds of business applications of Boeing, which are managed in Boeing data centers will be moved to the Google cloud and will use Google’s analytic tools. 

Furthermore, Amazon Web Services will be used by the aerospace company to strengthen its engineering and manufacturing processes. According to Boeing, the business awarded to Microsoft will “leverage the Microsoft Cloud and its [artificial intelligence] capabilities to update its technology infrastructure and mission-critical applications with intelligent new solutions that are data driven.” 

Official Comments 

Susan Doniz, Boeing’s CIO and senior VP for information technology and data analytics, said, “This represents a significant investment in the digital tools that will empower Boeing’s next 100 years. These partnerships strengthen our ability to test a system – or an aircraft – hundreds of times using digital twin technology before it is deployed.” 

Wall Street’s Take 

Recently, Jefferies analyst Sheila Kahyaoglu reiterated a Buy rating and price target of $270 on the stock. 

Consensus among analysts is a Strong Buy based on 12 Buys and four Holds.

The average Boeing price target of $259.13 implies 43.8% upside potential. Shares have decreased 28.4% over the past year. 

Investor Wisdom 

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Boeing, with 3.3% of investors maintaining portfolios on TipRanks increasing their exposure to BA stock over the past 30 days.

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