Founded in 2018, Archer Aviation (ACHR -1.82%) designs and develops electric vertical takeoff and landing (eVTOL) aircraft. These aircraft are designed to be used in urban air mobility (UAM) networks, an emerging industry that features transportation systems utilizing small, automated aircraft to move people and cargo in urban areas. Archer Aviation was founded by University of Florida alumni Brett Adcock and Adam Goldstein, the latter of whom currently serves as the company's CEO and co-chairman of the board.
Its production aircraft, Midnight, is designed to carry four passengers along with a pilot as far as 100 miles at speeds up to 150 miles per hour. As of late 2024, Archer Aviation is in the process of getting its Midnight aircraft certified with the Federal Aviation Administration (FAA) so it can launch commercial service in 2025. The design of Midnight, which features 12 propellers attached to six booms on a fixed wing, allows for cruising altitudes of around 2,000 feet with noise levels that are approximately 100 times quieter than the average helicopter.
The Midnight eVTOL aircraft is completely electric, and its seats are made of flax fibers. Upon receipt of its final certifications from the FAA, Archer Aviation plans to operate its Midnight aircraft as a direct-to-consumer aerial rideshare service. It also hopes to make money from sales of its aircraft to other aviation operators.
Archer Aviation began trading on the New York Stock Exchange (NYSE) in September 2021. It went public through a special purpose acquisition company (SPAC) merger. Shares declined significantly in the aftermath of the IPO, and the stock has been generally volatile, trading around $9 at the end of 2024.
In this deep dive into investing in Archer Aviation stock, we'll explore how to buy shares of the stock, whether it deserves your investment dollars, how to invest in the stock through an exchange-traded fund (ETF), and more. Let's take a closer look.
Exchange-Traded Fund (ETF)
How to invest
How to buy Archer Aviation stock
Because Archer Aviation is publicly traded, the process of buying it is similar to purchasing shares of any other U.S.-listed stock. Here are the important steps you should follow to buy shares.
Step 1: Open your brokerage app
Log into your brokerage account where you handle your investments. If you don't already have a brokerage account, it's time to choose a broker.
Options include well-known brokers like Charles Schwab (SCHW -0.65%), Fidelity, and Robinhood (HOOD -1.58%). Take time to research the broker and features that are right for your investment needs.
Step 2: Search for the stock
Enter the stock ticker (ACHR for Archer Aviation) or the company name, Archer Aviation, into the search bar to bring up the stock's trading page. You should only get to this step after you have funded your account and are ready to buy shares.
Before you invest in Archer Aviation or any other company, it's crucial to understand its business model, financials, competitive advantages, and potential risks involved. Evaluate recent financial reports, analyst ratings, and news that can affect the company's growth trajectory over your investment horizon.
Step 3: Decide how many shares to buy
Consider your investment goals and be clear on how you're going to approach those goals as you build your portfolio. Then, consider how much of your portfolio you want to allocate to this transportation stock. If you don't already allocate money to investing in stocks regularly, make sure you're not using funds you expect to need anytime soon, such as for bills or other financial obligations.
Strategies like dollar-cost averaging, which involves investing a set amount of money into stocks on a regular basis, can be invaluable as you seek to diversify your capital across multiple industries, sectors, and companies. While your budget will heavily influence the number of shares you buy, other factors, such as your risk tolerance level and personal portfolio preferences, will affect much of a position you want to take in Archer Aviation.
Step 4: Select order type
Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay. You can also select a specific dollar amount to invest in Archer Aviation or a set number of shares on most order forms.
Step 5: Submit your order
By this point, you should understand Archer Aviation stock inside and out from your own research about the company, why you're buying it, and where it fits into your overall investment thesis. If you have researched and confirmed these details, you're ready to submit your buy order for Archer Aviation stock. Confirm the details and submit your buy order.
Step 6: Review your purchase
Check your portfolio to ensure your order was filled as expected, and adjust your investment strategy accordingly. You should ensure that you take the time to regularly balance your portfolio and ensure you're not overly concentrated in a particular stock or sector.
For a company like Archer Aviation, which is still pre-revenue and in its early growth stages, proceed with caution. It may be wise to make this a relatively small portion of your overall portfolio, then add to that position with time in accordance with your investment thesis and personal conviction about the business.
Stock
Should I invest?
Should I invest in Archer Aviation?
If you have the risk tolerance, sufficient investment horizon, and a well-diversified portfolio to invest in a speculative business like Archer Aviation, this could be an intriguing business to invest in the future of air mobility networks. On the other hand, if you prefer value or dividend-oriented businesses in more established industries, this stock might not be for you.
If you are interested in investing in Archer Aviation, it's important to understand how the company plans to run its business model as soon as the FAA allows it to get its Midnight aircraft off the ground and into regular commercial operations.
The company will have two correlating business segments. The first will be Archer UAM, its direct-to-consumer aerial ride share service. The second will be Archer Direct, a segment through which it sells its own aircraft to third-party operators.
Archer UAM will initially be launched in select major cities across the U.S. Because Archer Aviation develops and manufactures its own aircraft, management estimates the company will be able to enter the urban air mobility ridesharing market at competitive prices compared to ground-based ridesharing solutions.
In terms of plans for its second segment, Archer Direct, the company has its first notable purchase agreement lined up in the form of a partnership with United Airlines (UAL 0.34%). Archer Aviation and United have executed a conditional purchase agreement for as much as $1 billion worth of aircraft, with the potential for the airline giant to purchase another $500 million. In addition to United, Archer Aviation has received millions in funding as part of a long-standing strategic relationship with Stellantis (STLA 0.52%), the maker of brands like Jeep, Ram, Maserati, Dodge, and Chrysler.
Right now, neither Archer UAM nor Archer Direct is generating revenue for the business because the company is waiting for final government approvals for its aircraft to enter service. If all goes according to plan, the first Midnight commercial flights could occur in 2025. It's worth noting that Archer Aviation is actively working to build out its manufacturing infrastructure so that when approved, it can keep its supply chain moving and roll out production of Midnight aircraft at scale.
Management has noted that these initiatives include leveraging existing aerospace suppliers for the key components for Midnight, along with manufacturing its own differentiating components for Midnight in-house, such as its proprietary electric propulsion system. The company is in the latter stages of building out a production facility in California and just completed construction of a 400,000 square foot aircraft manufacturing facility in Georgia.
In December 2024, Archer Aviation announced a new partnership with Anduril Industries, a defense technology company that specializes in autonomous systems to develop hybrid vertical-take-off-and landing military aircraft. That same month, the company also reached an agreement with key entities across the aviation sector in Abu Dhabi to serve as the primary eVTOL aircraft manufacturer for the emirate's planned electric air taxi operations.
Profitability
Is Archer Aviation profitable?
Archer Aviation is not profitable and is still technically in the pre-revenue stage of its business. Its flagship aircraft, the Midnight electric vertical take-off and landing aircraft, is awaiting the final stages of FAA certification. The company hopes to start commercial services in 2025, but profits are unlikely to occur for at least the first few years of official business operations.
Dividends
Does Archer Aviation pay a dividend?
Archer Aviation does not pay a dividend. The stock is pre-revenue and has no earnings, so a dividend is not a realistic expectation for investors to have in the near future.
ETFs
ETFs with exposure to Archer Aviation
ETFs can provide an alternative to investing in more speculative businesses like Archer Aviation alongside more established companies. An ETF is like a pre-packaged basket of stocks that provides you with instant diversification to different businesses and industries with a single purchase of shares.
If you'd like to gain exposure to Archer Aviation through an ETF, several options to consider include the Ark ETF Tr-ARK Innovation ETF (ARKK -1.02%), SPDR (R) Ser Tr-SPDR S&P Aerospace & Defense ETF (XAR 0.5%), Ark ETF Tr-ARK Autonomous Technology & Robotics ETF (ARKQ 0.74%), iShares U.S. Aerospace & Defense ETF, the iShares Russell 2000 Growth ETF (ITA -0.56%), and the Ark ETF Tr-Ark Space Exploration & Innovation ETF (ARKX -0.23%).
Stock splits
Will Archer Aviation stock split?
Archer Aviation had no plans to split its stock in late 2024. Most companies only do a stock split when the price of shares has become too high for the average investor to purchase. Given the volatile state of Archer Aviation's shares, which were still just around $10, a stock split does not seem likely in the near future.
Related investing topics
The bottom line on Archer Aviation
Going into 2025, Archer Aviation is training its focus on strengthening its supply chain and manufacturing abilities while building piloted aircraft to be used in testing and early commercial deployment, assuming its Midnight aircraft receives the FAA's final stamps of approval. Archer Aviation is almost done with Phase 3 of the FAA's type certification process as of late 2024 and is advancing into the final Phase 4.
Management believes that the market opportunity for Archer Aviation and its Midnight aircraft is tremendous, while they admit that this space is still incredibly underdeveloped. That said, the air taxi and ridesharing industry present a space ripe for disruptors to take a foothold and build an emerging market into a dynamic operating environment.
Archer Aviation could be one of them. The company reportedly had an order backlog topping $6 billion in December 2024, and that was before its first aircraft had even been approved for commercial flight. The use cases for Archer Aviation's Midnight aircraft and any subsequent aircraft series remains immense, from defense applications to handling consumer ridesharing needs.
While shares of Archer Aviation are close to IPO prices, the stock has ballooned by more than 60% from the beginning of 2024 to the time of this article. For long-term investors with a healthy appetite for risk, Archer Aviation's potential may warrant a second look or even a moderate investment.
FAQ
Investing in Archer Aviation FAQ
Can you buy Archer Aviation stock?
You can buy shares of Archer Aviation since the company is publicly traded.
Is ACHR a good stock to invest in?
Archer Aviation is a speculative stock in the business of designing and developing electric vertical takeoff and landing (eVTOL) aircraft for use in urban air mobility networks. If that is a space that interests you, Archer Aviation could be worth a second look.
Where can I buy Archer Aviation stock?
You can buy shares of Archer Aviation through the brokerage account of your choice, just as you would any other U.S.-traded stock.
Who are the investors in Archer Aviation?
Archer Aviation is owned by both individual and institutional investors. Because the company is publicly traded, anyone with a funded brokerage account can buy shares of Archer Aviation stock.
