Archer Aviation (ACHR 5.62%) is trying to do what pretty much every urban driver in the world wishes they could: build a shortcut over congested city streets.
Its solution to city traffic is a four-passenger electric air taxi that can fly up to roughly 100 miles on a single charge and reach speeds of about 150 miles per hour (mph). If Archer can manage to get this thing in the air, it could replace an hour-long slog through traffic with a 10-to-20-minute flight through open air. More than a scene from The Jetsons, Archer's electric vertical takeoff and landing (eVTOL) aircraft could unlock a market opportunity that Morgan Stanley once estimated might reach $9 trillion by 2050.
However, with minimal revenue to Archer's name and an unlicensed air taxi stuck on the runway, investors are still wise to ask: Will this eVTOL start-up one day command the skies, or should you skip this $6 stock? Let's take a look.
Image source: Archer Aviation.
Archer plans to start U.S. operations in 2026
Up until now, the story around Archer Aviation has been roughly the same. It's an interesting idea, but without regulatory approval, it's hard to imagine Archer's aircraft carrying paying passengers in the real world.
That, however, could change this year. In its first-quarter update, Archer said it closed out the third part of the FAA's four-stage type certification process -- the first eVTOL company in the U.S. to do so. With one stage left to go, Archer now expects to begin initial U.S. operations later in 2026 through the White House's eVTOL Integration Pilot Program.
This does not mean that Archer will fully commercialize Midnight in 2026; it still has to complete the fourth phase before it can put paying passengers in the air. But the opportunity to fly does give Archer a pathway to demonstrate its technology in a real-world setting, which, if successful, could strengthen its case.
Archer ended the quarter with a net loss of roughly $218 million, but it has $1.8 billion in cash, equivalents, and short-term investments. That balance sheet should be strong enough to keep Archer humming for the next two or three years (annual cash burn has averaged $538 million).
NYSE: ACHR
Key Data Points
Should long-term investors pounce?
Truthfully, Archer's latest news, while not bad in itself, doesn't change anything for the stock. However you slice it, investing in Archer today is still a bet on a future industry that doesn't exist yet.
Not only that, but Archer is still priced for success. Even at roughly $6 a share, the eVTOL hopeful carries a $4.7 billion market capitalization. That's a hefty valuation for a company that could still be a few years away from generating meaningful revenue.
True, the company is making progress -- I'll give it that. But for most investors, this stock is still "watch list" material. Aggressive investors may want to open a starter position below $7. Those less tolerant of volatility might want to wait until the pathway to commercialization is more clear.
