The futuristic dream of passenger electric vertical take-off and landing (eVTOL) aircraft zipping through the skies is moving closer to reality. Archer Aviation (ACHR -7.40%) expects to deploy a fleet of its “Midnight” eVTOL to an international customer later this year, ahead of an anticipated certification by the Federal Aviation Administration (FAA) in the U.S.
Market excitement regarding these milestones has sent shares of the eVTOL start-up soaring more than 160% in the past six months. On the other hand, 2025 has brought some renewed turbulence amid lingering uncertainties, with the shares down 35% from their 52-week high of $12.47, which it reached on Jan. 7.
Should you buy Archer Aviation stock on this dip before a potential takeoff to new heights? Here’s what you need to know.
Key developments for Archer Aviation
Archer Aviation’s four-passenger Midnight eVTOL can travel up to 150 miles per hour for short-range commuter trips, flying above traffic congestion. The company envisions a worldwide network supporting thousands of its aircraft operating as an air taxi service, with pricing that eventually becomes competitive with ground-based transportation. Archer also intends to sell the aircraft directly, including through deals with United Airlines and Southwest Airlines.
Industry experts estimate the urban air mobility market could be a $1 trillion opportunity by 2040.
Archer has made significant progress toward its urban air mobility vision, recently completing a dedicated manufacturing facility in Georgia, where it plans to build 10 Midnight aircraft this year. The site, developed in partnership with automobile giant Stellantis, is intended to scale to an annual production rate of 650 aircraft by 2030. Archer expects to begin generating revenue by Q4 from the initial batch of Midnight eVTOLs destined for its first customer, Abu Dhabi Aviation (ADA) in the United Arab Emirates.
Image source: Getty Images.
Following more than 400 successful test flights, Archer will use those “Launch Edition” models as part of its final FAA “Type Certification,” demonstrating aircraft safety and performance in real-world conditions.
Perhaps the biggest development for Archer this year was the announced partnership with Anduril Industries to jointly develop a hybrid-propulsion aircraft for military applications. This move leverages Anduril’s expertise in advanced technology, including artificial intelligence (AI) and automation, to target U.S. Department of Defense contracts, further expanding the company’s market opportunity.
With more than $1.1 billion in total liquidity, Archer Aviation believes its current funding represents ample resources to achieve its objectives.
Reasons for caution
Archer Aviation has plenty of catalysts on the horizon that the market will follow closely. The first Midnight rolling off the assembly line, a piloted test flight, commercial delivery, and possibly even an FAA announcement could all help the stock get back on track.
Nevertheless, before rushing to pack your bags with shares, some headwinds warrant caution. The main risk is that the currently established timetable for those key milestones gets pushed back, considering the multiple operational challenges. One logistical bottleneck for Archer is the need to train and hire possibly hundreds of pilots on the new platform.
Company financials are also unpredictable. From a net loss of $570 million in 2024, analysts project only $29 million in revenue this year from initial Midnight sales, before ramping up to $151 million in 2026. The growth outlook is compelling, but also in the context of Archer’s current $4.6 billion market value, suggesting shares are priced with high expectations over the next several years.
With profitability likely to remain elusive into the next decade, the currently solid balance sheet may not last forever, which could renew focus on questions regarding margins and cash flow. All this is in an environment where Archer will face increasing competition, including Joby Aviation,China-based EHang, and several private companies developing alternative eVTOL aircraft.
Is Archer Aviation stock a buy?
Despite the risks, I’m cautiously bullish on Archer Aviation stock. The transformative potential of eVTOLs and the company’s first-to-market advantage provide upside that helps justify the valuation premium, even though Archer still has much to prove. Investors convinced the company can execute its long-term growth strategy could consider adding a small position in shares to a diversified portfolio, with a rebound to $12.47 possible by this time next year.
Dan Victor has no position in any of the stocks mentioned. The Motley Fool recommends Southwest Airlines and Stellantis. The Motley Fool has a disclosure policy.
