General Electric vs. Joby Aviation: Which Industrials Stock Is a Better Buy in 2026?

GE Aerospace generated FY2025 revenue of nearly $45.9B, up 18.5% year over year, net income of about $8.7B, and $7.3B of free cash flow, supporting the article's preference for GE as the lower-risk aviation investment despite its 39.7x forward P/E. Joby Aviation's FY2025 revenue rose to $53.4M from $136,000, but it posted a $929.8M net loss and negative $563.8M free cash flow while awaiting FAA certification for its electric air-taxi platform. The article characterizes Joby as a high-upside but speculative position, citing regulatory, infrastructure, cash-burn, and consumer-adoption risks.

Analysis

The relevant GE question is not headline growth but whether the aftermarket mix can outrun the valuation embedded in a near-40x forward P/E. Engine shop visits are capacity-constrained and carry materially higher incremental margins than original equipment; sustained airline fleet utilization and delayed aircraft deliveries can therefore extend GE’s pricing power for 12-24 months. The offset is that production bottlenecks defer OE cash conversion while potentially raising warranty, expedite-freight, and supplier-support costs, leaving little room for a guidance miss at the current multiple.

JOBY’s valuation is principally an option on certification, manufacturing repeatability, and unit economics—not on its presently immaterial revenue base. FAA milestones can generate sharp event-driven reratings over days, but final certification without a credible route-network, charging, insurance, and utilization plan would shift investor focus rapidly to cash burn and dilution. Toyota’s strategic relationship lowers industrialization risk relative to smaller peers, yet does not eliminate the key bottleneck: producing conforming aircraft at a cost that permits viable fares.

The more differentiated relative view is GE versus the aerospace supply chain. Persistent OEM delivery constraints keep installed fleets older for longer, benefiting GE service exposure and potentially airlines’ maintenance providers, while hurting lower-tier suppliers whose working capital rises before volume converts to cash. For eVTOL, the market may be underpricing a winner-take-most regulatory/operational moat but overpricing the timing: commercialization is likely to be measured in years, while equity-financing needs recur much sooner.

Consensus appears too binary in treating JOBY and ACHR as direct substitutes. Certification execution, capital access, and commercialization partnerships will likely create material dispersion; however, neither is a clean near-term revenue compounder. GE’s premium can persist if service revenue and free-cash-flow conversion continue to exceed expectations, but a commercial-aviation utilization downturn or a supply-chain-driven cash-flow reset would compress the multiple quickly.

Key Decisions for Investors

• Maintain GE as a core long only on pullbacks; target a 12-18 month thesis around aftermarket mix and cash conversion, but size below a typical industrial position given valuation. Falsify on a material cut to free-cash-flow guidance, evidence of deteriorating shop-visit pricing, or two consecutive quarters of delivery shortfalls without service-margin offset.
• Use GE/LHX as a relative-value expression: long GE, short LHX in modest size over 3-6 months if commercial aftermarket remains resilient and defense award timing softens. This isolates GE’s civil-engine service leverage from broad aerospace/defense beta; exit if defense budget momentum or LHX order intake materially accelerates.
• Do not establish a fundamental JOBY long solely on certification headlines. Set an event-driven watch for independently disclosed FAA certification milestones, manufacturing-rate targets, and cash runway through commercial launch; absent those, treat any position as venture-style and cap it at small speculative size.
• Prefer JOBY over ACHR only after JOBY demonstrates a verifiable certification or production lead and funded runway through the next major aircraft build phase. Until then, a long JOBY/short ACHR pair is premature because both remain highly correlated to eVTOL sentiment and financing conditions.
• Monitor TM for a second-order read-through rather than a standalone aerospace trade: additional manufacturing commitments or equity support would validate JOBY’s industrialization path, while any delay or reduction would increase JOBY dilution risk and likely pressure the entire eVTOL peer group.