Archer Aviation (NYSE:ACHR) is a prominent player in the eVTOL sector, which gained popularity this year. They are developing electric vertical takeoff and landing aircraft for air mobility services. This industry offers significant advantages over helicopters, including reduced noise. The global eVTOL market, valued at $11.15 billion in the previous year, is expected to reach $35.79 billion by 2032, growing at a compounded annual growth rate (CAGR) of 12.37%. This will have big implications for ACHR stock.
Accordingly, Archer is poised for success in this growing market. Let’s look at the two main reasons why buying ACHR stock now can be a smart move.
#1 Archer Aims to Begin Flights Ahead of Other Rivals
Less than ten days after securing an agreement for air taxi operations in the United Arab Emirates, Archer Aviation’s Midnight Aircraft achieved its maiden flight, marking a significant step towards commercial air taxi certification. Archer Aviation, specializing in electric vertical takeoff and landing (eVTOL) aircraft, debuted the Midnight in December 2022 and has received funding from Stellantis and United to advance its production efforts.
The US Air Force entered into a contract with Archer worth up to $142 million for aircraft purchases. In June, Archer obtained a Special Airworthiness Certificate from the FAA, confirming compliance with safety requirements for flight tests. Although initial flight tests were anticipated to commence shortly, the maiden flight of the Midnight eVTOL occurred four months later.
Archer recently celebrated the maiden flight of its Midnight eVTOL aircraft, moving closer to air taxi certification. The company emphasized four years of flight testing experience as the foundation for this achievement. Archer’s CEO, Adam Goldstein, anticipates launching Midnight to the market in 2025 after further advancements in the flight test program.
#2 Cathie Wood Believes in ACHR Stock
Cathie Wood, a renowned contrarian investor, is known for buying struggling tech stocks. However, despite its recent strong performance, she recently added Archer Aviation to her fund’s holdings. This indicates her confidence in ACHR’s potential for further growth.
Cathie Wood started building her position in Archer in 2021 but significantly increased her holdings since early August, going from 9.3 million to 22.5 million shares. She added nearly half a million shares in the past week. This suggests optimism about Archer’s future despite being a pre-revenue company, with commercialization not expected until 2025. Archer’s earnings calls mainly provide updates on progress and capital needs.
By October 19, Wood acquired 1.27 million shares of Archer, bringing Ark Invest’s total ownership to 23.34 million shares. ACHR holds the 24th spot in all Ark ETFs with a 1.07% allocation.
Buy ACHR Now Before It Takes Off
Archer went public through a SPAC merger and initially faced challenges, but in 2023, its stock doubled due to growing interest in eVTOLs. While it’s currently in a pullback, it’s worth monitoring. Archer secured prominent backers, contracts with the U.S. Air Force, and a major airline partnership, positioning the company for success in the growing multi-trillion dollar eVTOL industry.
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.
