Archer Aviation (ACHR +1.15%) has become a popular stock in many investors' portfolios as the electric vertical takeoff and landing (eVTOL) company builds its impressive Midnight aircraft and works to secure air-taxi customers.
Amid its progress to tap into the expanding eVTOL market, investors have poured into Archer's stock, causing its share price to skyrocket 264% over the past year. But even with its promising aircraft technology and impressive returns, I think investors would do better to not launch into buying this stock right now. Here's why.
Image source: Archer Aviation.
Archer Aviation has no revenue
Archer reported its Q2 results at the beginning of August, and in its SEC filing, management said the "company has not recognized any revenue as of June 30, 2025." This might not be a surprise to current shareholders, but potential Archer investors need to understand that by purchasing the company's stock at this time, they're investing in a company that has not yet generated any sales.
Earlier this year, the company said its "Early Launch" program for its Midnight aircraft will help "drive public acceptance, build operational experience and generate early revenue," but even if sales do come later soon, they will likely be very modest.
The problem isn't that Archer is taking a while to build its Midnight aircraft and get them to customers, or that launching an air taxi service will have a lot of hurdles along the way. The problem for investors is that after four years of being publicly traded and its share price soaring for the past two years, the company still has no revenue to show for it.
The company's losses are significant
Without any sales, it's not surprising that Archer is losing money. But its losses are significant, and expenses are rising, making any eventual profitability more difficult.
Archer had a GAAP net loss of $206 million in Q2 -- more than double its losses in the year-ago quarter -- and its operating expenses rose 45% to $176 million.
Archer has $1.7 billion in cash to invest in the company, which is a good thing. But it had to sell 85 million shares in Q2 to raise $850 million of those funds. That caused some share dilution, and if the company were to need more cash down the road, it's possible it might have to take the same route to raise capital.
Significant investments in a company trying to build an expensive aircraft aren't surprising. But when you combine Archer's widening losses and its expanding costs with the fact that it's not generating any revenue, then those losses are far more problematic.
NYSE: ACHR
Key Data Points
There is some unwarranted enthusiasm in the market right now
I think it's worth mentioning that there's a general enthusiasm in the market right now that is likely driving some stocks higher than they deserve. The artificial intelligence boom is pushing many stocks higher, and by association, some technology-focused companies and cryptocurrencies have risen sharply over the past few years.
In short, investors are feeling far more ambitious about investing in speculative plays right now. While this isn't Archer's fault, I think its share price could be benefiting from this speculative investment trend.
For example, Archer's stock recently rose by more than 10% on social media rumors that it was partnering with Tesla on an air taxi. But when Tesla made its recent tech announcements without any mention of Archer Aviation, the eVTOL company's shares quickly fell.
Don't buy Archer Aviation right now
For all of the reasons above, I don't think investors should buy Archer Aviation's stock right now. Perhaps the company will be a good investment in the future, but the company has a lot to prove before I'd feel comfortable putting money toward it.
If you're interested in Archer, keep a close eye on whether the company is able to generate revenue this year from its Midnight aircraft or if management communicates concrete estimates for 2026 sales. Even then, the company will have to prove that sales are growing fast enough to help offset its expanding losses.
