Why Archer Aviation Stock Popped 18.6% Last Month
Key Points
Archer Aviation continues to make progress toward getting its eVTOL product approved.
The company is now working with defense contractor Anduril.
With heavy cash burn and zero revenue, Archer Aviation's stock is very risky to buy right now.
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Shares of Archer Aviation (NYSE: ACHR) popped 18.6% last month, according to data from S&P Global Market Intelligence. An electric vertical takeoff and landing (eVTOL) start-up, Archer Aviation, released an earnings update in May that highlighted its continued progress toward getting its innovative aircraft flying commercially and for defense contracts.
The pre-revenue stock remains down 20% this year. Here's why shares were rising in May, and whether now is a good time to add the stock to your portfolio.
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Regulatory progress and a huge cash pile
Archer Aviation is one of a batch of publicly traded stocks trying to bring eVTOL technology to market. Its Midnight aircraft uses battery power and quiet rotors, which should allow it to operate throughout major urban areas. For the military, Archer is working with Anduril to make a similar aircraft. Since most defense stocks have been on fire in 2026, Archer likely got a bit of this tailwind as well.
Earnings were released on May 11th. Management says that U.S. operations are slated to begin this year, with the 2028 Olympic Games in Los Angeles being an event where the company wants to showcase its technology to the world. The company is also advancing through certification with the Federal Aviation Administration (FAA), completing phase 3 last quarter. There is now only the final phase 4 left for the Midnight Aircraft to undergo before it will be ready to operate commercially, sparking investor excitement.
At the same time, eVTOL stocks as a whole are down from all-time highs hit in early 2025, around a year ago. Archer Aviation's stock is down approximately 50% from its highs as of this writing.
Image source: Archer Aviation.
Should you buy Archer Aviation stock?
Buying Archer Aviation stock means taking a leap of faith with this new technology and management team. It currently generates close to zero in annual revenue, which makes sense since its aircraft is not fully approved by the FAA.
Over the last twelve months, Archer Aviation has burned $615 million in free cash flow, a record as the company aims to build up its aircraft manufacturing capacity. Its balance sheet shows $1.8 billion in liquidity to keep investing for the future, but the company will need to reach a point within the next few years when it starts generating revenue and turning the corner toward profitability.
Whether you believe in that story or not should determine if you buy shares of Archer Aviation at a market cap of $4.9 billion today.
Should you buy stock in Archer Aviation right now?
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Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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