Could an Airline Stock Be a BETTER Buy Than... Nvidia?

Ladies and gentlemen, please return your tray tables to their upright positions because United Airlines just landed a record-breaking year… and it’s not because they started handing out more than pretzels for a mid-flight snack. 

The Chicago based airline brought in $985 million in profit during the fourth quarter of 2024, a 64% jump from last year. Adjusted earnings hit $3.26 per share, blowing past analysts’ estimates of $3.04. Wall Street loved it so much that United’s stock climbed 3.4% after hours, making shareholders as giddy as my wife when she scores the emergency exit row.

For the year, United flew 174 million passengers… another record… and saw annual passenger revenue climb 6%. Turns out, people really missed sitting next to strangers who insist on taking off their shoes mid-flight.

You’d think the magic would be happening in business class, where seats recline flat and the drinks flow like a West Virginia college football game. But nope, United is cashing in on basic economy… the airline version of surviving on ramen noodles and white bread. These tickets don’t come with seat assignments, let you bring a carry-on maybe, and slap you with late boarding for good measure. Yet somehow, revenue from these torture-lite tickets jumped 20%.

Andrew Nocella, United’s Chief Commercial Officer, said they’re “incredibly happy” with basic economy’s success. In other words: “We make money while you suffer.” 

Now, for those of you who prefer champagne and caviar to Diet Coke and pretzels, United has your back too. Premium ticket sales grew 10% year-over-year because flying in style is still the ultimate humblebrag. Lie-flat seats? Check. Instagram-worthy meals? You bet. And if you’re an overachiever, United’s loyalty program got a 12% revenue bump in Q4 because people will literally do anything for miles, even if it means pretending to enjoy an 8-hour layover in Newark.

Oh, and in 2024, United made it crystal clear: if you want free Wi-Fi, you’ve gotta join their loyalty program. No membership, no browsing Wall Street Bets at 30,000 feet. Ruthless. United also saved cash where it counts: jet fuel. The airline spent 7% less on fuel in 2024. Combine that with a rebound in business travel (because Zoom calls are finally out and boozy client dinners are back in), and United has proven they can crack the code going forward.  

In terms of the stock, United’s share price is up 160% in the last 12 months. Which means it’s outperforming Nvidia (so yeah, things are going good). In fact, United was the third-best performer in the entire S&P 500 last year, behind only a nuclear energy company and Palantir.

Looking ahead, United is cruising into 2025 with a bullish forecast that could make Delta sweat a little. They’re rolling out 4K seatback screens and expanding Starlink-powered Wi-Fi. Oh, and they’re doubling down on their strategy of offering both Ritz Carlton-level luxury and Motel 6-level fares.

The airline’s “broad spectrum” approach seems to be working. United, whatever you’re doing, keep it up.

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Stocks.News has positions in United, Coke, Zoom, Palantir, Nvidia, and Delta mentioned in article.