Archer Aviation Inc. (ACHR), a leading eVTOL aircraft manufacturer headquartered in California, saw its shares plunge 11% last week, followed by another 7% the next day, as investors feared the advancement of a shareholder lawsuit and the future of its partnership with Stellantis (STLA).
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Famously attributed to Warren Buffett and often quoted by active traders, the saying goes: “Be fearful when others are greedy, and greedy when others are fearful.” The adage seems to apply perfectly to what’s happening with ACHR stock.
I believe this irrational fear has created an opportunity for long-term investors after a thorough evaluation of Archer’s manufacturing capabilities, regulatory environment, and the long-term demand environment for urban air mobility. I remain Bullish on Archer Aviation stock, despite the short-term legal uncertainty.
Negative Headlines Are Mostly Noise
My bullish outlook on Archer remains unchanged despite two recent negative headlines that briefly weighed on market sentiment. While a shareholder lawsuit in Delaware has been cleared to proceed to the next stage, I believe this legal development poses minimal risk to the company’s core operations in the medium to long term.
The lawsuit alleges that Archer misled investors with overly optimistic timelines and inaccurate claims about its technological advancements. However, over the past few years, Archer has consistently demonstrated the technological edge of its flagship eVTOL, Midnight—effectively countering much of the skepticism. I see this litigation as largely immaterial in the long run.
Concerns about Stellantis potentially severing ties with Archer also appear overstated. Although Stellantis recently abandoned its hydrogen vehicle program following a disappointing earnings report, this move reflects a reallocation of resources toward its core automotive business—not a shift in its commitment to Archer. The partnership with Archer is a key part of Stellantis’s broader strategy to diversify into the high-growth advanced air mobility market. Walking away now would undermine years of investment and strategic positioning.
In short, I view both developments as short-term noise rather than indicators of any structural weakness in Archer’s long-term trajectory.
Commercialization is No Longer Decades Away
My bullish outlook on Archer Aviation is grounded in the belief that the company is on a clear path toward securing full FAA certification, a critical milestone that would allow it to launch commercial operations. While Archer remains a pre-revenue company and continues to post significant cash outflows—$94.6 million in Q1 alone and an average of roughly $84 million per quarter over the last nine quarters—I believe the prospect of regulatory approval meaningfully reduces long-term business risk.
According to recent filings, Archer has entered the fourth and final stage of the FAA’s certification process, having successfully completed the first three. If progress continues as planned, the company expects to obtain full certification by the end of this year. Importantly, there are strong indications that U.S. regulators are supportive of both eVTOLs and the broader urban air mobility sector.
The FAA’s creation of a new aircraft category specifically for certifying Archer’s Midnight model reflects a flexible, forward-thinking approach to regulation. Additionally, the agency’s ongoing collaboration with eVTOL manufacturers to establish safety standards signals a clear commitment to enabling commercialization. These regulatory tailwinds reinforce my confidence in Archer’s long-term potential, even in the face of short-term financial challenges.
Archer is Well-Positioned to Tap Into a Multi-Billion-Dollar Opportunity
My long-term optimism about Archer Aviation’s profitability is rooted in the vast market opportunity the company is targeting. According to Mordor Intelligence, the eVTOL aircraft market is projected to reach $1.19 billion by the end of this year and grow at an impressive CAGR of around 30%, hitting $4.36 billion by 2030. Key growth drivers include a favorable regulatory landscape, advances in battery energy density, and the urgent need for alternative mobility solutions as global airports approach maximum capacity.
The broader urban air mobility market further highlights the scale of Archer’s potential. Currently valued at $5 billion, this market is expected to expand at a 19% CAGR, reaching $70 billion by 2040. These long-term projections underscore the significant runway ahead for Archer as a first mover in the space.
I’m also encouraged by Archer’s strong cash position, which totaled just over $1 billion at the end of Q1. Management has highlighted this as the largest cash reserve in the industry, providing the company with a meaningful buffer to navigate regulatory hurdles and sustain operations through the pre-commercialization phase. This financial strength positions Archer well to capitalize on market growth and execute its long-term vision.
What is the Future of ACHR?
On Wall Street, ACHR stock carries a Moderate Buy consensus rating based on four Buy, two Hold, and zero Sell ratings over the past three months. ACHR’s average stock price target of $11.75 implies almost 5% upside potential over the next twelve months.
While current analyst estimates suggest limited near-term upside, I believe those projections are likely to shift meaningfully once Archer secures full FAA certification. At this stage, many analysts remain conservative due to the company’s pre-revenue status.
However, considering Archer’s steady progress through the FAA certification process, the strong long-term demand outlook for the urban air mobility sector, and Archer’s clear leadership position within the industry, I view the company as a compelling investment in the future of global transportation.
Short-Term Noise, Long-Term Opportunity
Archer Aviation shares have come under pressure following two negative headlines last week. However, a closer look reveals that the perceived risks are unlikely to have a meaningful impact on the company’s long-term outlook. With a strong first-mover advantage in the urban air mobility space, Archer is well-positioned to capitalize on this emerging market—and I remain confidently Bullish on the company’s ability to turn that opportunity into tangible long-term profitability.
With market participants currently fearing ACHR’s immediate future, now may be the time to adopt a bullish stance with a long-term view.