Cathie Wood still isn’t done buying up Archer Aviation (NYSE:ACHR). The founder of Ark Invest made headlines last week when she doubled down on the air taxi innovator. But Wood has made it clear she’s even more bullish on ACHR stock than previously expected.
On Friday, Aug. 25, Ark Invest made multiple trades, adding more Archer shares to three separate exchange-traded funds (ETFs). This brings the fund’s collective holdings to roughly 13.600 million shares across its ARK Innovation ETF (NYSEARCA:ARKK), ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) and ARK Space Exploration & Innovation ETF (BATS:ARKX).
ACHR stock is off to an excellent start this week as momentum builds from this bullish sentiment. Does this mean that the rest of Wall Street shares this take on Archer? Let’s dive into Wood’s recent trades and assess what investors should be expecting.
What’s Happening With ACHR Stock
Anyone who follows Wood knows that she often targets beaten-down tech stocks. While Archer has been struggling since last week, it doesn’t fit that criteria. On the contrary, ACHR stock has risen more than 105% over the past two quarters, displaying the type of momentum it’s hard not to be impressed by. Today the stock is continuing this growth trend. As of this writing, it is up 10% and doesn’t seem to be slowing down.
Archer has been one of Wood’s favorite stocks recently. As InvestorPlace reports, her fund made multiple purchases throughout August 2023 alone. ACHR stock is still the 28th holding in her ARK Innovation ETF, occupying 2.14% of the fund’s ownership. Ark’s Aug. 25 trade added 129.350k shares. On the same day, the fund added 4.893k shares to ARKX and 17.864k to ARKQ. According to Ark Invest’s webpage, all shares were purchased at the price of $5.78. Archer currently trades at $6.27 per share.
Wall Street analysts haven’t issued too many price targets for ACHR stock yet. But those who have tend to regard it favorably. It currently boasts a strong buy consensus, with four out of five analysts rating it as a buy. One firm upgraded its price target last week, even as shares dipped. Per TipRanks:
“Raymond James analyst Savanthi Syth raised the firm’s price target on Archer Aviation to $9 from $8 and keeps an Outperform rating on the shares following the Q2 results. The firm believes the recent equity raise and dispute settlement remove two notable overhangs, and the expanded partnership with the DOD announced on July 31 further derisks the path to commercialization, the analyst tells investors in a research note.”
Clearly, the optimism that Wood feels for Archer is growing as experts continue to express positive outlooks toward the company. And as InvestorPlace‘s Eddie Pan reports, Ark isn’t the only institutional investor who has doubled down on ACHR stock this year. The stock’s recent declines have likely incentivized buyers to snap up shares before they rebound even before.
Why It Matters
If one of the market’s best-known contrarian investors is bullish on a company like Archer, others will likely continue to follow her path. She clearly knows that it is operating in a market with strong growth potential. The electric vertical take-off and landing (eVTOL) market is projected to reach a valuation of 23.4 billion by 2030, expanding at a compound annual growth rate (CAGR) of 52%.
That gives one of the space’s leading companies ample room to run as demand for its products increases. ACHR stock is still trading at a low share price that offers investors an attractive point of entry. Wood could easily continue buying if this slow growth pattern continues.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
