Archer Aviation Stock: A Millionaire Maker in the Making? | The Motley Fool

Archer Aviation Stock: A Millionaire Maker in the Making? | The Motley Fool
January 25th, 2025

It’s such an unusual idea that it is almost impossible to believe. But then, so were online shopping, mobile phones and surgical robots, which are all currently in use. Can you tolerate above average risk in order to gain above average returns? Perhaps you are hoping to find a way to turn a small amount of money into a seven figure sum within a relatively short space of time. Well, these kinds of trades are out there. Some of them turn out to be duds, for the most part. It’s pretty rare, but every once in a while, one of them goes against the odds. The only real difficulty is to tell the difference between the hype and a product which is really going to take off and catch on with the public. You may have not come across the term before. And most of those who have, probably didn’t hear about the company as a investment idea. More likely, they heard about Archer from the concept itself, which is pretty outrageous, yet so plausible today. Archer Aviation has created a small electrical aircraft that can serve as an air taxi, which means that it can transport passengers from one point to another in crowded cities using airways. This will make traffic jam issues that can take an hour to clear, a few minutes problem. The aircraft in question is called the Midnight. It is a four seater aircraft which uses six battery packs to power 12 different electric motors which can be oriented to provide conventional forward flight (like an air plane) or vertical flight (like a helicopter). This flexibility is of course the value which makes it a real air taxi. And it isn’t just a concept. Archer has. It has built a few of them, in fact, and the design and the vehicle has been partly certified by the Federal Aviation Administration. The rest is the stuff that is more logistical, like the number of test flight hours and the certification of the manufacturing plant. This is mainly its 400,000 square foot facility in Covington, Georgia which was completed last month. When running at full capacity by 2030, Archer plans to produce 650 of its Midnight aircraft every year. It sounds ridiculous at first. Flying taxis were once just a concept from science fiction. Science has a way of catching up with the fantasy, however. A number of others it seems are willing to put their money on it. For instance, a group of organizations in and around Abu Dhabi concretized plans to offer air taxi services in this market in December. In November, Japan Airlines also announced a similar partnership, signing a deal to buy up to US$500 million of Archer’s vertical takeoff and landing aircraft to support that effort. Southwest Airlines, Stellantis, automobile maker, and South Korea’s KakaoMobility have also shown interest in Archer’s technology dumpster dollars. Connect the dots. That is a good number of industrialists who are already in the know making the same basis bet. In other words, that air taxis are a viable business model. In this view, Mordor Intelligence expects the market for air taxis to expand at a compound annual growth rate of 23% between this year and 2030, although it is almost non-existent at the moment. Precedence Research puts the figure closer to 29% and believes that air taxis will become a $60 billion annual industry by 2034. That is a lot of growth from nearly zero today and almost nothing from the kind of eVTOL aircraft that Archer has created. The situation can change a lot between now and their first commercial flights. It’s not the sort of backdrop that favors shares of an industry’s highest-profile name. Archer Aviation is already very close to scaling up its production to meet market demand and more demand may emerge after a few successful flights. Some of these flights may take place in the aforementioned Abu Dhabi, it could be as early as the end of this year. The company has also identified five potential locations for landing and taking off in and around San Francisco, with the Kilroy Oyster Point site also expecting to begin flight operations could be before the end of 2025. Los Angeles is not far behind. Of course, when the concept is proven, people may well want to buy these aircraft that can turn an hour’s drive into a 10 minute hop. As noted, although Archer Aviation’s Midnight aircraft is semi-certified by the FAA, there are a few more things that need to be done before it can be used for actual commercial purposes. And although several companies that are interested in applying its tech to transport passengers have invested money in buying them, Archer still has to build them. That takes time. A lot can change between now and then, including the appearance of new competitors or difficulties in obtaining the required permits. It is also possible that the idea is not as marketable as one might have thought. Air taxis are the same as Amazon was in the early days of the Internet – and as much as smartphones were the natural progression from the earliest mobile phones – because they are a solution to a problem that does, in fact, exist. If they do take off (both literally and figuratively), the shares of Archer Aviation could take off as well. In fact, if you buy enough of a stake now, they could even make you a millionaire. Just keep this high-risk stock on a short leash, and don’t invest more than you can afford to lose. It’s a bit of a all or nothing kind of bet.

Shandor Brenner

Shandor Brenner is an American journalist recognized for his sharp and insightful reporting on social and political issues. His work is known for its depth, integrity, and the ability to highlight critical societal concerns.

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