For the past several years, investors have been excited about the emerging electric vertical takeoff and landing (eVTOL) market and its potential to transform transportation. By some estimates, the eVTOL market could be worth $27 billion by 2034.
One company that has received widespread attention and massive share price gains is Archer Aviation (ACHR +1.54%), which makes an eVTOL called Midnight and has been working hard over the past few years to forge partnerships and secure certifications for its planned air taxi services.
All the enthusiasm for Archer and the eVTOL market has pushed the company's share price up 186% over the past three years. So, with its share price hovering around $8, is now a good time to buy Archer stock? I don't think that would be a smart move, and here's why.
Image source: Archer Aviation.
Why many investors are excited about Archer
There are a few legitimate reasons why Archer investors are excited about the company. The first is that it has a functioning and impressive aircraft. Its Midnight aircraft has completed many successful test flights and is working on certifications from a handful of countries for its commercial air taxi service.
The company has also forged many partnerships for future air taxi services, including with United Airlines and Southwest Airlines, and received an investment from Stellantis.
What's more, Archer has more than $2 billion in total liquidity, giving the company significant funding to continue investing in its aircraft and technologies. Though, it's worth pointing out that $650 million in recent capital came from a stock sale that diluted shareholder value.
But Archer has a few glaring problems
Let's begin with the most obvious problem: Archer generates no revenue. The company has been publicly traded for more than four years and still doesn't have any sales.
Archer's CEO, Adam Goldstein, told Bloomberg in November that the company would begin reporting revenue this year. Those sales, which are likely to be very low initially, could come from the company's expected launch of an air taxi service in Abu Dhabi later this year. While a step in the right direction, Archer's revenue is likely to be minimal for a while, considering the company doesn't expect full-scale passenger flights until 2028.
NYSE: ACHR
Key Data Points
Even if we assume that sales begin later this year, there's the bigger issue of Archer's widening losses. The company reported a GAAP net loss of nearly $130 million in the third quarter of 2025, a nearly 13% increase from the year-ago quarter. And costs are rising, with Archer's operating expenses jumping 43% from the year-ago quarter to nearly $175 million in the quarter.
And finally, on top of all of this, it's important to remember that Archer is trying to launch a new service in an unproven market. This means investors have no idea whether its services will actually have enough demand to generate significant sales, how Archer will fend off competition, or if it can reduce its losses and become profitable.
Investing in any stock involves some uncertainty, and there are no guarantees with any investment. But with so many unknowns with Archer right now and the company not having any revenue, buying Archer is a highly speculative move that I believe investors should avoid.
Archer's share price gains over the past few years look far more like investors getting caught up in the "what if" of the eVTOL trend and buying based on the stock's past momentum, rather than on any solid fundamentals of a growing business.
