Archer Aviation (ACHR -2.36%) stock has jumped 32% since the start of October. The catalyst? The electric vertical takeoff and landing (eVTOL) aircraft maker bought an insolvent competitor's patent collection, widening the company's competitive moat.
Flying taxis still sound futuristic, but Archer is building real aircraft and signing real deals. The question is whether paying a massive premium (more on this below) makes sense for a company that still needs Federal Aviation Administration (FAA) approval to carry passengers.
Is the stock still a buy after its latest rally? Below, I'll break down the recent developments to find out.
Image source: Getty Images.
What Archer does
Archer develops an eVTOL aircraft that lifts off vertically (like a helicopter) and transitions to winged, airplane-mode flight. Its flagship model Midnight is designed to carry one pilot and four passengers and optimized for urban hops on the order of 20 miles to 50 miles per trip.
The business works by operating these aircraft as air taxis through deals with airlines, property developers, and cities. Archer plans to own some aircraft while selling others to partners who will run their own routes.
Buying cheap assets
Archer won an auction in October 2025 to buy roughly 300 patents from Lilium, a German eVTOL maker, in insolvency proceedings. The $21 million price tag grows Archer's patent collection to over 1,000 assets covering battery systems, flight controls, and electric engines.
The Lilium deal shows how the eVTOL sector is shrinking. Numerous eVTOL companies raised billions through special purpose acquisition company (SPAC) deals in 2021 and 2022, but most have struggled to actually build and sell aircraft. Archer benefits by picking up technology at bargain prices while weaker rivals disappear.
Building the first network
Archer is planning its first commercial network in the United Arab Emirates (UAE). In October 2025, Cleveland Clinic Abu Dhabi and Archer announced plans for the UAE's first hospital landing pad, looking at both passenger trips and urgent organ delivery.
The UAE network gives Archer a realistic path to first operations once it's built. Government approval may come faster there than in the U.S., letting Archer prove its aircraft works in real service while finishing FAA certification.
The company is also the Official Air Taxi Provider for the 2028 Los Angeles Olympics. That partnership creates a high-profile showcase if Archer can secure FAA approval by then.
The defense opportunity
Archer Defense might bring in revenue faster than commercial flying taxis if the company secures a major award from the Department of Defense (DoD), which President Donald Trump recently gave the sobriquet of Department of War. Archer teamed up with defense tech firm Anduril in December 2024 to build a military aircraft for DoD programs, though no program award has been announced yet.
The U.S. Air Force already has Archer aircraft for testing. If the company wins a sizable defense contract in the next year or two, that money could be much bigger than early commercial sales and completely change the investment story.
Archer raised about $300 million in 2025 just to fund defense work and grow manufacturing. The company expects military sales will provide cash flow before the passenger market takes off.
The price problem
Archer had over $1.7 billion in cash as of its second-quarter 2025 report, giving it money to reach certification and start production. The company is currently building six Midnight aircraft, with three almost finished, though FAA type and production certification remains incomplete.
The company sports a market cap of $8.4 billion, and shares trade at roughly 100 times the consensus 2026 sales estimate. That's a rich multiple that assumes a steep ramp up from 2027 onward and leaves limited room for delays or execution hiccups.
Archer's current valuation only makes sense if revenue grows ultra-fast from 2027 to 2030, as planned. If there are any delays in FAA approval or manufacturing problems push sales out, the company could be forced to raise more money by diluting shareholders.
The company also competes with Joby Aviation and other eVTOL makers racing to get certified. If competitors start commercial flights first or land better deals, Archer's growth could slow.
The speculative opportunity
Archer offers a chance to invest in a huge potential market if urban air travel takes off. The growing patent collection, strong partnerships, lots of cash, and defense possibilities create several ways to win.
The stock requires comfort with high risk and possible share dilution. This is a speculative growth investment where success depends on execution over several years, not near-term profits.
