Archer Aviation (NYSE:ACHR) and Joby Aviation (NYSE:JOBY) both slid close to 6% on Thursday morning before trimming some of their losses, as investors appeared to reassess the broader eVTOL sector. Concerns surrounding the two companies, as usual, continue to center on commercialization timelines, continued heavy cash burn, and the possibility that air taxi developers could still require substantial additional funding before generating meaningful revenue.
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Forget margin or options. Here's how the pros trade ACHRThe decline came despite Archer offering another meaningful update regarding the certification progress of its Midnight aircraft during the company’s first-quarter report. Archer stated that it became the first eVTOL manufacturer to complete Phase 3 of the FAA’s four-stage Type Certification process, representing another important step toward eventual commercial operations. Earlier this year, the FAA accepted all of the Midnight aircraft’s Means of Compliance verification documents, clearing the path for Transition to Issue and Approval testing after remaining issue papers are resolved.
Archer has now advanced into Phase 4 of the certification process, where the FAA evaluates compliance with airworthiness requirements through formal testing and detailed analysis. The company continues targeting commercial launch activity in the UAE before eventually expanding into additional international and U.S. markets.
Canaccord analyst Austin Moeller notes that Archer’s progress on Midnight certification appears to be “compounding quarter-over-quarter,” supporting management’s efforts to narrow the flight-testing gap with peers. However, piloted transition flights now look more likely in the second half of the year, likely reflecting continued software validation work across flight controls, rotors, batteries, and motors.
Elsewhere, Moeller thinks Archer’s progress on its hybrid VTOL aircraft program, along with its air-traffic management work with Palantir, should draw investor interest. In partnership with Anduril, the company aims to unveil “one of the most sophisticated vertical lift platforms ever developed” later this year.
Management describes the system as an “attritable tactical VTOL gunship” with a 1,000 lb payload capacity and a 2,000-mile range enabled by a hybrid powertrain, designed for long-distance missions such as Pacific island hopping. The expected average selling price is significantly below that of an Apache helicopter. Archer plans to unveil the rotorcraft and begin securing phased government contracts in 2026.
Because Archer supplies the airframe, management also expects the platform to be adaptable for international deployment, including NATO and Middle East allies, without ITAR constraints, enabling global sales ambitions.
“We continue to view a contract award or further details on the hybrid VTOL drone being built with Anduril as a critical valuation unlock for ACHR’s stock, once it occurs,” Moeller said on the matter.
All told, Moeller assigns ACHR shares a Buy rating alongside a $12 price target, which points toward 12-month returns of ~90%. By comparison, the analyst takes a far more cautious stance on JOBY, maintaining a Hold rating on the stock. (To watch Moeller’s track record, click here)
At $12.33, the Street’s average price target on ACHR is now a little higher and offer one-year upside of ~94%. On the rating front, based on 5 Buys vs. 2 Holds, the analyst consensus rates the stock a Moderate Buy. (See ACHR stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.