Archer Aviation ACHR Plunges 2.72% Amid Legal Scrutiny and Zacks Downgrade

Archer Aviation (ACHR) fell 2.72% on Friday, hitting its lowest level since May 2025, with an intraday decline of 3.70%. The stock’s selloff reflects a mix of regulatory risks, legal uncertainties, and divergent analyst opinions, despite recent production and partnership advancements.

The company faces ongoing legal scrutiny as multiple firms have launched investigations into potential securities law violations, raising concerns over investor disclosures and market manipulation. These developments coincide with a Zacks Investment Research downgrade to a "Sell" rating, driven by a 14.4% drop in earnings estimates to -$0.78 for the year. The bearish sentiment contrasts with "Buy" ratings from Wall Street firms like Canaccord Genuity, which maintains a $13 price target.

Archer’s stock has historically been volatile, with sharp swings tied to strategic milestones. A 29% surge in late July followed a partnership with the U.S. Air Force, underscoring defense sector interest. Meanwhile, production expansion plans—aiming for two units per month by year-end—and FAA certification progress, including extreme condition testing and a recent flight certificate, highlight operational strides. However, delays in regulatory approval or legal costs could disrupt revenue from pre-orders with customers like Ethiopian Airlines.

Institutional backing from Stellantis, Boeing, and ARK Invest has bolstered optimism, yet critics argue the $6.35 billion market cap remains speculative without near-term profitability. The stock’s trajectory will likely hinge on upcoming FAA certification, Q2 earnings, and the resolution of legal disputes, which could either validate its eVTOL ambitions or amplify risks for investors.