Archer Aviation (ACHR 1.18%), a frontrunner in electric vertical takeoff and landing (eVTOL) technology for urban air mobility, is emerging as a foundational player in the next trillion-dollar transportation revolution. The company's dual-revenue approach, targeting high-margin commercial air taxi routes and mission-critical defense applications, positions it to scale rapidly into a multibillion-dollar annual business within three to five years.
Hard numbers validate the investment case. Archer Aviation sports a prospective $6 billion order backlog, a figure that nearly matches its current $6.1 billion market capitalization. While execution on this order book will be critical, the clear-cut demand for the company's unique aircraft is a promising sign for long-term investors.
Image source: Getty Images.
Beyond aviation, strategic partnerships with Anduril Industries and Palantir Technologies (PLTR -1.11%) position Archer Aviation to monetize autonomous defense systems and artificial intelligence (AI)-powered logistics, creating multiple revenue streams that extend far beyond traditional aircraft manufacturing.
Palantir Technologies also brings a special kind of magic to the table. The AI pioneer's Artificial Intelligence Platform (AIP) has driven explosive revenue growth and share-price gains over the past 12 months. This collaboration with Palantir Technologies creates tremendous upside for Archer Aviation, as the companies plan to revolutionize aviation logistics and operating systems through advanced AI integration.
With this background in mind, here's why Archer Aviation stock scans as a downright bargain under $15 a share.
Financial strength provides execution runway
Archer Aviation's Q1 2025 results demonstrate the financial stability needed to execute on its ambitious plans. The company closed the quarter with over $1 billion in cash and cash equivalents, an exceptional war chest for a pre-revenue company. Moreover, Q1 operating expenses came in at just $113.1 million (non-GAAP), showing disciplined spending as the rapidly growing air taxi company marches toward commercialization.
What's the key takeaway? At this burn rate, Archer Aviation has roughly 2-1/2 years of runway without raising additional capital, more than enough time to reach cash-flow-positive operations, based on its current launch roadmap. That doesn't mean that another large capital raise isn't a possibility, but it's unlikely to occur anytime soon, removing a key overhang from the stock's upward momentum.
The ramp up toward commercialization is gaining momentum
Archer Aviation is executing its commercialization strategy with the UAE as the first market. The company plans to deliver its inaugural commercial Midnight aircraft to the UAE this summer, marking the transition from development to revenue generation. Archer Aviation has already secured design approval for the first hybrid heliport in Abu Dhabi, clearing a key regulatory hurdle for operations.
The "Launch Edition" program is gaining momentum by targeting premium operators willing to invest in early access to the technology. Abu Dhabi Aviation and Ethiopian Airlines have signed on as the first customers, validating Archer Aviation's strategy of focusing on sophisticated operators, rather than attempting a broad consumer launch. This phased approach allows the company to refine operations and demonstrate commercial viability before scaling to additional markets.
Valuation disconnect creates opportunity
Archer Aviation's current valuation presents a compelling entry point, with shares trading at roughly the equivalent of the company's entire $6 billion order book. This creates significant upside potential, even with conservative assumptions.
Consider the math: Applying a 1.37x multiple to the prospective order book values Archer Aviation at approximately $15 per share. That's extraordinarily conservative, when high-growth tech companies routinely trade at 5x to 10x projected revenue -- and some command far higher multiples.
Why is this key to understand? The Palantir Technologies partnership positions Archer Aviation as a high-growth tech company, not merely another aviation play. The market may be fundamentally mispricing Archer Aviation stock as just another low-margin aviator.
Driving this point home, a more realistic 2x multiple applied to the order-book backlog suggests fair value around $24 per share, yet shares trade well below this level. This valuation gap reflects skepticism about the company's core execution risk in an emerging industry.
However, with commercial deliveries beginning this year and a massive addressable market opening up, Archer Aviation's current share price appears to offer an asymmetric risk-reward opportunity for long-term investors.
