Archer Aviation (NYSE:ACHR) is in the spotlight after signing a new deal with NASA. The agreement with the agency is likely to significantly boost investors’ confidence in the company, which is developing electric vertical take-off and landing (eVTOL) aircraft. In the wake of the announcement, ACHR stock is climbing 10% in early trading.

Although ACHR stock is still down 13% for the past month, it is up 22% for the past six months.

Archer’s Deals

Under the agreement, ACHR and NASA will jointly develop “battery cell safety and systems” for various types of aerospace vehicles.

More specifically, the agency intends to evaluate the”battery system design” that Archer uses for its Midnight EVTOL aircraft.

“NASA and Archer will focus on further testing the safety, energy and power performance capabilities of the battery cells,” Archer explained. 

“The battery cell form factor chosen by Archer, a cylindrical cell, has a track record of safety, performance and scalability proven through decades of volume manufacturing, deployed across many applications globally, including in millions of electric vehicles.”

Archer indicated that it is likely to partner with NASA on multiple other projects in the future.

Additionally, in November, Archer disclosed that Air Chateau International, a major private airline based in the United Arab Emirates, had ordered 100 Midnight aircraft from the eVTOL maker. That deal could generate revenue of up to $500 million for Archer.

ACHR Stock: What to Watch Going Forward

Investors should assess Archer’s success in securing more high-value orders from large airlines and governments.

This will determine whether ACHR stock rallies in the medium-to-long term.

On the date of publication, Larry Ramer 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.