Wall Street sees Archer Aviation (ACHR 1.90%) as just another electric flying taxi company burning cash while chasing FAA certification. Yes, the risks are real -- certification delays, massive cash burn, fierce competition, and the challenge of scaling a new form of aviation.
But that narrow view completely misses what's really happening here: Archer is quietly building the most valuable defense aviation asset outside the traditional primes -- and a major acquisition or corporate restructuring could soon expose this hidden value. Here's a deeper look at why I think these forces are building to drive a major breakout in the stock in the not-so-distant future.
Image source: Getty Images.
The White House just changed everything
Trading around $10 with a market cap near $5.4 billion at the time of writing (July 1, 2025), Archer has delivered impressive returns, up over 245% in the past three years. But those gains pale compared to what's coming. In June 2025, following President Trump's executive order establishing an eVTOL Integration Pilot Program, Archer raised $850 million at $10 per share, bringing its total liquidity to an industry-leading $2 billion.
This wasn't just another funding round. The White House explicitly aims to establish U.S. "dominance" in eVTOL technology through its new Integration Pilot Program. The timing is perfect -- Archer serves as the Official Air Taxi Provider for the Los Angeles 2028 Olympics, creating a high-profile deadline for commercial deployment.
CEO Adam Goldstein called the executive order a "seminal moment" -- and he's right. Unlike competitors burning through capital with single-market strategies, Archer's dual approach and $2 billion war chest provide multiple paths to profitability.
While well-funded competitors like Joby Aviation (JOBY 3.64%) pursue both civilian and military markets, Archer has assembled something unique: an exclusive defense partnership combining its hybrid-electric vertical takeoff and landing (eVTOL) technology with Anduril's autonomous systems and Palantir Technologies' (PLTR 1.62%) artificial intelligence (AI) infrastructure. This triumvirate represents a $100 billion-plus opportunity that doesn't require FAA certification.
The defense disruption play
Yes, both Archer and Joby have defense contracts. But Archer's approach is fundamentally different. The late-2024 Anduril partnership creates a hybrid-propulsion aircraft specifically for military use -- not adapted civilian aircraft. This matters because hybrid systems offer extended range and payload capacity that pure electric vehicles can't match right now.
More importantly, Anduril brings its Lattice AI platform, already integrated into hundreds of military systems. Combined with Palantir's March 2025 partnership for AI-powered aviation software, Archer offers the Pentagon something unprecedented: a fully integrated, AI-enabled vertical lift capability from three of defense tech's hottest companies.
The partnership targets a "program of record" -- Pentagon-speak for guaranteed multiyear funding. These contracts can reach billions annually. With defense demand "stronger than expected," according to Goldstein, the company aims to build early hybrid-propulsion defense prototypes soon, distinct from its Midnight commercially oriented aircraft.
The split scenario unlocks everything
Here's where it gets interesting. Archer could unlock massive value through a corporate split, separating its commercial and defense operations. This solves multiple problems at once: Stellantis, with its substantial stake in Archer, wants to focus on commercial air mobility -- not get entangled with defense contractors. A split allows the commercial division to pursue the $1 trillion urban air mobility market with Stellantis and United Airlines, backed by the White House pilot program.
Meanwhile, the defense division -- supercharged by Anduril and Palantir -- becomes an attractive acquisition target for Northrop Grumman (NOC 1.04%) or other defense primes. Northrop has explicitly prioritized AI, autonomous systems, and next-generation aviation. The aerospace giant's Orbital ATK acquisition ($9.2 billion total in 2018) proved its ability to integrate cutting-edge aerospace assets, expanding capabilities in solid rocket motors, missile systems, and space technologies.
Multiple paths to value
Archer isn't waiting for corporate action. The company delivers its first piloted Midnight aircraft to Abu Dhabi Aviation this summer. Manufacturing has begun at its Georgia facility, targeting two aircraft per month by year-end. The Palantir partnership adds another layer, developing AI-powered air traffic systems worth billions.
With a pro forma liquidity position of $2 billion, Archer has industry-leading financial resources to execute on both opportunities simultaneously. Wall Street still prices it primarily as a pre-revenue eVTOL company, largely ignoring its defense potential. But with Anduril recently beating Boeing for major contracts and White House backing, the market's dismissive attitude is changing.
When investors recognize Archer's transformation from flying taxi company to critical defense asset, today's $10 stock will look like the bargain of the decade. After all, defense stocks tend to sport premium valuations and stellar free cash flows.
