Bombardier (TSX:BBD.B) inventory has surged 17% within the final two weeks, breaking its earlier excessive of $110 in October 2024 to make a brand new all-time excessive of $181.60. What drove this rally? Is that this inventory a purchase at its new excessive, or is it a bubble about to pop?

What drove Bombardier’s refill 17%?

At a time when most corporations have been delaying spending as a consequence of tariff uncertainty, a couple of sectors have been growing spending. Amongst them had been gold mining and defence corporations.

Not too long ago, America elevated its tariff on Canadian imports to 35%, in keeping with its different commerce companions. Nonetheless, Bombardier was unaffected because it was protected beneath the United States-Mexico-Canada Settlement (USMCA). In actual fact, the enterprise jet maker secured a US$1.7 billion order for 50 Challenger and International plane, together with a long-term upkeep contract from a brand new buyer. There’s additionally an possibility for 70 extra plane with upkeep service which, if exercised, can deliver the order worth to US$4 billion.

This order announcement drove the refill as a lot as 43% in July. The following development rally got here in September over expectations of rate of interest cuts. Bombardier can also be set to deliver into operation its International 8000 plane within the second half.

A majority of the corporate’s orders are delivered within the fourth quarter, which pushes the money circulate to that quarter. Thus, its inventory value tends to rise within the latter half of the yr.

Bombardier is on monitor to fulfill its fiscal 2025 steerage of US$9.25 billion in income, up 6.7% year-over-year, and over 150 plane deliveries. The corporate additionally expects to double its free money circulate to $500–$800 million from $232 million in 2024. Thus, it comes as no shock that the enterprise jet maker’s share value lastly reacted to the earnings figures.

Bombardier inventory has ridden its seasonal September rally since 2022, when the corporate emerged from the pandemic.

Is Bombardier inventory a purchase?

The latest rally has put Bombardier inventory within the overbought class with a Relative Energy Index (RSI) of 78. The RSI examines the final 14-day inventory value momentum on a scale of 0–100, with a studying above 70 indicating overbought circumstances and beneath 30 indicating oversold circumstances.

It’s buying and selling at a forward-price-to-earnings (P/E) ratio of 16.7 occasions, which is the best within the final 5 quarters. The newest order win of $1.7 billion will see order deliveries start in 2027 and has not been captured on this ratio. Now might not be a very good time to purchase the inventory.

It is a inventory whereby timing can considerably influence your returns. Not like a couple of development shares, resembling Loblaw, that develop all year long, Bombardier witnesses development spurts, whereby its share value grows by double digits in per week or a month after which stays flat or falls for a couple of months earlier than the subsequent development spurt, if any.

Thus, it has a beta of two.9. Beta is a measure of a inventory’s volatility in opposition to the market, which has a beta of 1. Beta doesn’t inform if the share value strikes in the identical route because the market, however represents the hole between market momentum and the momentum of the inventory.

The inventory tends to fall within the April to June interval after it reviews seasonally weak first-quarter earnings. That could be a good time to purchase the inventory.

Tips on how to make investments on this inventory?

Those that purchased Bombardier inventory on March 28, 2024 earned 212% capital appreciation, and those that purchased it on the similar time in 2025 noticed a 126% rally. In some years, there are deviations, as was the case in 2023 when the inventory peaked in March 2023.

Thus, you need to take a look at the RSI, P/E worth, order ebook, and low cost from the 52-week excessive when shopping for the inventory. For now, holding is the easiest way to generate returns.