SPECIAL REPORT The Top 7 Stocks for 2024

Here’s Why Ignoring Archer Aviation Stock Is a Terrible Idea

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  • Archer Aviation (ACHR) is among the leaders in innovation in the electric vertical takeoff and landing (eVTOL) aircraft space.
  • This flying car stock introduced its Midnight model, a four-passenger eVTOL aircraft.
  • The company also inked an MOU for pre-orders for this model, signaling strong demand.
ACHR stock - Here’s Why Ignoring Archer Aviation Stock Is a Terrible Idea

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Archer Aviation (NYSE:ACHR) has seen a remarkable 230% year-to-date surge in its stock. Indeed, ACHR stock is among the top growth stocks on many investors’ radar, with a strong business development focus and intriguing product launches.

Ending Q3 2023 with a $600 million liquidity buffer, Archer is well-positioned for commercialization in 2025. The company is expanding globally, with a $142 million U.S. Air Force order and partnerships in India and the UAE. Currently, Archer is set for international operations in 2026.

I anticipate further partnerships and deals in other jurisdictions to materialize in the upcoming quarters, securing a robust growth trajectory for 2026 and beyond. Indeed, I think the upward trend we’re seeing in ACHR stock reflects this positive trajectory and may be an appealing valuation.

Archer Aviation and Urban Air Mobility

Archer Aviation, at the forefront of urban air mobility, turns the fantasy of flying taxis into reality. Chief Safety Officer Billy Nolen’s announcement at the Dubai Airshow confirms tangible progress, aiming for a market launch in 2025. The company pioneers the Midnight, a four-passenger electric vertical take-off and landing (eVTOL) aircraft, anticipating FAA approval by 2025. The UAE, supported by investors like Mubadala, will witness Archer’s flying taxis by 2026.

Archer Aviation’s Chief Commercial Officer, Nikhil Goel, outlined inaugural routes in the UAE, linking Dubai and Abu Dhabi airports to key destinations. Initial high demand is expected, with premium pricing set to decrease as the fleet expands. Archer envisions a substantial fleet in the UAE and eyes market potential in India. With its safety-focused design, test flights for the Midnight are underway in California.

The Midnight recharges in 6-7 minutes, covering 160 km at 240 km/h. Operating it is simple, with a 20-minute learning curve. Initial ride-share costs are $4-$5 per mile, decreasing over time. Archer plans to optimize helicopter routes for a safe, cost-effective, and eco-friendly urban mobility solution.

Archer and Air Chateau’s Purchase of 100 Midnight Aircaft

Additionally, Archer Aviation and Air Chateau International signed an MOU at the Dubai Air Show 2023 for Air Chateau’s planned purchase of 100 Midnight eVTOL aircraft, valued at $500M. A non-refundable payment of $1M was made by December 31, 2023.

As the first private heliport operator in the UAE with key facilities, Air Chateau focuses on last-mile services for ultra-high-net-worth individuals. Archer’s collaboration aims to enhance air taxi operations in Abu Dhabi and Dubai by 2026, exploring infrastructure investment opportunities. Archer Founder and CEO Adam Goldstein appreciates Air Chateau’s recognition and plans to purchase up to 100 Midnight aircraft, emphasizing their efforts to revolutionize urban mobility.

Flying Cars Arriving Shortly in the UAE

Archer Aviation, an American eVTOL OEM, envisions introducing air taxis in the UAE by 2026. Their eVTOL aircraft could offer convenient inter-city travel, from Abu Dhabi International Airport to Dubai Mall.

Archer is awaiting FAA approval for its air taxi operations. Chief Safety Officer Billy Nolen foresees pricing comparable to premium ground rideshares, like Uber Black. As operations scale up, costs may align with Uber X, offering significant time savings for inter-city travel.

In collaboration with the Abu Dhabi Investment Office (ADIO), Archer selected Abu Dhabi as its first global launch site for air taxi operations, which is slated to start in 2026. Initial U.S. operations are planned for 2025 in Chicago and New York, while a manufacturing facility is under construction in Atlanta, Georgia, capable of producing 650 aircraft. Discussions are ongoing to establish a parallel facility in Abu Dhabi’s Smart and Autonomous Vehicle Industry (SAVI) Cluster.

Archer Is Set Up for Success

Archer, gearing up for commercial flights in 2025, strategically expands its market presence. Collaborating with the Abu Dhabi Investment Office, it aims to launch electric taxis in the UAE by 2026. Additionally, partnerships with InterGlobe Enterprises for taxi services in India position Archer for significant growth, promising potential rewards for investors..

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.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.


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