The electric vertical takeoff and landing (eVTOL) sector is one that’s come into focus for many investors in recent months. Indeed, a large portion of this improved sentiment is a result of some rather significant partnerships and industry-leading work from Archer Aviation (NYSE:ACHR).
A leader in this sector, Archer is a stock I’ve had on my watch list for some time. In many respects, I’m kicking myself for not buying this name on its previous dip, with ACHR stock already up more than 125% year to date (YTD), at the time of writing.
And so, plenty of reasons exist for investors to take a bullish stance on this stock, even at these higher levels. Let’s dive into specifics that bulls are inspecting right now when it comes to Archer Aviation.
Archer Aviation and the U.S Air Force
Archer Aviation recently took a big step into the world of military aviation with a U.S. Air Force contract. The contract initially was valued at nearly $1 million with a potential value up to $142 million. It leverages Archer’s eVTOL tech for enhanced military mission efficiency. This marks the start of a possibly massive collaboration, exploring the role of eVTOL tech in national defense.
The initial payment involves a mobile flight simulator for Air Force pilot training on Archer’s eVTOL tech. Also, this collaboration includes sharing wind tunnel reports and certification plans, highlighting their commitment to advancing aviation technology.
Archer CEO Adam Goldstein praised the swift execution of the U.S. Air Force contract, highlighting the Department of Defense’s commitment to transformative technology. The focus is on Archer’s Midnight eVTOL aircraft, boasting vertical takeoff, a 1,000 lbs payload, and a unique electric powertrain. Further, the U.S. Marine Corps has shown interest in the Midnight eVTOL as an alternative to traditional helicopters.
Archer Secures Financing for New Facility
Archer aims to replace car rides with quick, cost-effective eVTOL flights. With over $65 million in secured financing for phase one of their manufacturing facility, the company is advancing its capital-efficient approach. By partnering with leading aerospace suppliers and utilizing incentives from Georgia and Stellantis, Archer strives to streamline manufacturing. It envisions producing a high volume of aircraft while minimizing capital costs.
Archer’s phase one manufacturing facility will be ready in 2024, facilitating the launch of Midnight in 2025. Phase two expansion will increase production space to 900,000 square feet, targeting over 2,000 aircraft annually. Archer aims to revolutionize urban travel, replacing lengthy car commutes with fast, sustainable, and cost-effective electric aircraft flights. Midnight, designed for quick turnaround flights, will be built in their Covington facility and serve various markets.
ACHR Is Ready to Take Off
Archer Aviation has seen an impressive YTD stock price surge, demonstrating its strong market performance and investor confidence in eVTOL technology.
Archer plans to launch air taxi services with United Airlines (NASDAQ:UAL) in 2025, capitalizing on the growing urban air mobility market. ACHR’s potential has attracted ARK Invest, which acquired over 230,000 ACHR shares, indicating institutional confidence and the company’s undervaluation.
With trading volumes above averages and trading above key trend lines on daily charts, ACHR indicates potential upside from its current levels. Archer Aviation emerges as an attractive option in the eVTOL and urban air mobility market, with significant growth prospects.
On the date of publication, Chris MacDonald did not have (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.
