Archer Aviation Stock Soared 160% - Still Time to Board This Rocket?
Archer Aviation just posted monster gains—up a staggering 160% over the past year. Investors are scrambling to figure out if this electric vertical takeoff and landing (eVTOL) play has more altitude left.
Riding the eVTOL Wave
The urban air mobility sector keeps heating up, and Archer's been one of its brightest stars. The company's focused on designing and developing electric aircraft that aim to revolutionize urban transport—think aerial ridesharing without the traffic.
Market Momentum vs. Valuation Reality
Sure, 160% returns turn heads—and rightly so. But here's the catch: parabolic moves often attract both believers and bag-holders. The classic fintech dilemma—chasing performance or fearing the peak.
Future Skies: Clear or Cloudy?
Archer isn’t just flying on hype. They’ve struck partnerships, moved toward certification, and built a legit pipeline. Progress? Visible. Execution? Still unfolding.
So—should you invest? If you believe in the future of urban air mobility and have the risk tolerance, maybe. If you’re just reading a one-year chart? Do everyone a favor—including yourself—and don’t.
Image source: Getty Images.
Archer's business could soon start to generate revenue
There's a lot of potential for eVTOLs to act as air taxis and ease traffic in busy cities. Archer's Midnight aircraft needs to first obtain certification from the FAA, and it is making good progress in that effort. On Monday, the company announced that the Midnight completed its longest flight yet -- 55 miles. It earned praise fromCFO Mike Leskinen while doing so. "I was impressed by how quiet the aircraft was," Leskinen said in a press release. United has been an early investor in Archer.
The progress is a good sign that Archer may be able to obtain certification in the NEAR future, potentially by next year. While the company hasn't been generating any revenue thus far and is in the early stages of production (its goal is to produce two aircraft per month by the end of the year), it has been securing orders, with its order book totaling around $6 billion.
The big challenge with Archer's stock is determining its worth
Archer has a lot of potential to grow in value, but there's a significant caveat to consider, which is that the entire eVTOL market was worth just $2 billion in 2024, based on estimates from Grand View Research. While it's projected to be worth $28.6 billion by the end of the decade, that's by no means a sure thing.
Plus, Archer isn't alone in the eVTOL space aswill offer formidable competition, and its market cap is around $14 billion. These two companies alone are already at a combined $20 billion in market cap for an industry that's in such early stages of its growth. And I still have my doubts about just how popular eVTOL aircraft will be, and how practical they may be given the challenges air traffic controllers already deal with today, without air taxis flying around all over the place.
There are a lot of question marks around the industry's future growth that investors shouldn't take for granted. Even if you do believe air taxis are a sure thing and will be the next big trend in travel, then there's still the question about Archer's and Joby's already high valuations, and how much more upside can be attainable for those stocks.
Archer is a highly speculative stock
It may not be too late to invest in Archer simply because the industry is in its early stages. Instead, it may actually be too soon to buy shares of the company. I'd be interested to first see what kind of gross margin the company can achieve on its aircraft to get an idea of whether there can be a path to profitability. This is a capital-intensive business, and breaking even could be a big challenge. And demand is still a big question mark.
At this stage, there's a lot of speculation fueling eVTOL stocks, and that can make investing in Archer a risky proposition. Unless you can stomach that, you may be better off taking a wait-and-see approach with the stock.
