Los Angeles is known for many things, including heavy traffic. But one company is taking steps to address this long-standing problem with its flying car futuristic technology. Archer Aviation (NYSE:ACHR) has announced a plan to bring its air mobility network to Southern California. This will mean that electric vertical take-off and landing (eVTOL) air taxi rides will be available for LA-based customers within the next two years. This news hasn’t boosted ACHR stock yet but if Archer is able to safely set up shop in LA, it could be a transformative catalyst for the company.
Does this mean that now is the time to load up on ACHR stock before its network expansion transforms the way Los Angeles travels? Let’s take a closer look at this development and assess what it is likely to mean for investors.
What’s Happening with ACHR Stock
Even after a difficult trading day, ACHR stock is poised to close out the week in the green. Shares have fallen 8% as of this writing but remain up 2% for the past five days. Shares started trending upward in early July 2024 but have since come down, erasing much of the stock’s progress. As InvestorPlace contributor Josh Enomoto notes, this negative momentum could be due to valuation problems with ACHR stock. But investors have cause to be optimistic, as Archer recently reported better than expected earnings per share for Q2 2024.
Now the company is poised for even further growth as it eyes an expansion into a market ripe with opportunity. Los Angeles is synonymous with heavy traffic congestion. According to the LA Progressive, it has been getting worse this year, even as the city’s population has declined. Locals have long complained that the city’s public transportation is limited and problematic. This means people with the means would likely seize the opportunity to travel by air. As Electrek reports:
“The planned eVTOL network includes several vertiports around the Los Angeles metropolitan area, including LAX Airport, Orange County, Santa Monica, Hollywood, Burbank, Long Beach, Van Nuys, and the University of California (USC). Archer’s flagship Midnight eVTOL aircraft will lead the new era of sustainable air travel and has already received a Part 135 certification from the FAA en route to bonafide commercial flight operations.”
Granted, the air mobility network won’t be reaching Los Angeles right away. But as it gets closer, ACHR stock will likely benefit from the buzz surrounding this pivotal launch. Archer has chosen the ideal city to offer people the opportunity to bypass traffic all together and go by air.
On the date of publication, Samuel O’Brient 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
