Archer Aviation: Soaring Past the Storm—Why the eVTOL Pioneer Deserves a Second Look

Archer Aviation (ACHR) has long been a lightning rod for skepticism. Short-seller reports, volatile stock prices, and a cash-burning balance sheet have left investors wary. Yet beneath the noise, the company is quietly assembling a portfolio of strategic partnerships, regulatory milestones, and a valuation that appears increasingly disconnected from the soaring potential of the urban air mobility (UAM) market. For long-term investors willing to look past the near-term risks, Archer presents a compelling contrarian opportunity.

The Strategic Partnership Playbook: Validating the Vision

Archer's most compelling argument lies in its ability to forge partnerships that validate its business model and accelerate infrastructure development. The company's collaboration with United Airlines stands out as a cornerstone. The airline's $300 million order for 250 Midnight eVTOL aircraft—and its $50 million equity stake in Archer—signals that a major player in traditional aviation sees vertical takeoff planes as a complementary asset to reduce door-to-door travel times in congested cities. This isn't just a customer relationship; it's a strategic endorsement of Archer's role in reshaping urban transport.

Equally critical are its deals with infrastructure partners. The collaboration with Anduril Industries UK—backed by the UK government's defense and logistics ambitions—opens a dual-use market for Archer's hybrid VTOL aircraft, blending commercial air taxis with military logistics. Meanwhile, partnerships with PANYNJ and NYCEDC are laying the groundwork for vertiports in New York, a market with $1.2 billion in annual helicopter ride revenue today that Archer aims to electrify and scale.

The Stellantis alliance, which could unlock up to $400 million in manufacturing support, is another game-changer. By leveraging Stellantis's automotive expertise, Archer aims to ramp production from 2 to 100+ aircraft monthly by 2027—a critical step toward commercial viability. These partnerships aren't just about resources; they're about credibility.

Regulatory Progress: The FAA Greenlight and Beyond

Regulatory approvals are the lifeblood of UAM, and Archer is making progress where it counts. The company's Midnight aircraft is on track to achieve FAA certification by late 2026—a milestone that would position it ahead of rivals like Joby Aviation and Airbus's CityAirbus. The $142 million received from the U.S. Air Force's Agility Prime program further underscores the military's confidence in Archer's technology, opening a potential second revenue stream in defense logistics.

Internationally, Archer's deals in the UAE—partnering with Etihad Aviation Training and Abu Dhabi's 2PointZero—highlight its global ambitions. The UAE's approval of the world's first hybrid heliport/vertiport in 2024 signals regulatory support in a region with high urban growth and infrastructure budgets. This progress is crucial: without certifications, even the best technology remains grounded.

Market Potential vs. Undervaluation: A Mispriced Growth Story

The UAM market's growth trajectory is staggering. The sector is projected to expand from $4.38 billion in 2024 to $23.5 billion by 2030, growing at a 31.2% CAGR (Compound Annual Growth Rate). Archer's current $6.18 billion market cap, however, is a fraction of this opportunity.

Consider this: Archer's valuation implies it will capture just 10% of the UAM market by 2030, even after a decade of scaling. Competitors like Joby Aviation (JOBY) trade at similar or higher valuations despite lagging partnerships and certifications. Meanwhile, Archer's $1 billion in cash and a net cash position of $952 million provide a runway until mid-2026—a critical period for certification and first revenue.

The risks are clear: Archer's $451 million free cash flow burn in 2024 and a beta of 3.13 (meaning its stock swings 3x as much as the market) make it a high-risk bet. Yet the company's path to profitability is logical: once its aircraft hit commercial service in 2027, recurring revenue from rides and logistics could turn the cash burn into a flood of cash.

Investment Thesis: A High-Reward, High-Risk Call

Archer is not a buy for the faint-hearted. The stock's volatility, short interest (11.7% of shares), and reliance on execution make it a speculative play. But for investors with a 5+ year horizon, the upside is compelling:

1. Catalysts Ahead: FAA certification (2026), first revenue (2027), and vertiport launches in NYC/LA could redefine the stock's narrative.
2. Undervalued Assets: The Midnight aircraft's $3.6 million price tag (vs. traditional helicopter costs) and Stellantis's manufacturing support suggest a path to scale.
3. Market Leadership: Archer's 250-aircraft order backlog with United and its early infrastructure partnerships give it a head start in a sector where first-mover advantage matters.

Investment Advice: Buy Archer at current levels ($11.20 as of June 2025) with a long-term view, but set strict stop-losses. A $13 price target (17% upside) reflects conservative assumptions about capturing 15% of the U.S. UAM market by 2030. Avoid if you can't stomach a potential 30% drawdown.

The Bottom Line

Archer Aviation isn't a sure bet—it's a high-stakes gamble on the future of urban transport. But with strategic partners in place, regulatory momentum, and a market cap that doesn't yet reflect the UAM boom, the company offers a rare chance to invest in a transformative technology at a discount. For those willing to look beyond the noise, Archer's stock could be the next great story in mobility—so long as it avoids a crash landing.