Is Archer Aviation Stock Your Ticket to Becoming a Millionaire?

Like beeswax melting from Icarus's wings, enthusiasm for Archer Aviation (NYSE: ACHR) has softened over the last six months, plunging the stock nearer and nearer to all-time lows.

As the Sun was to Icarus, many lofty goals have burned Wall Street's optimism away. FAA Type Certification for Archer's Midnight aircraft is still a year or two out, and its fleet of aircraft -- once predicted to reach the thousands by now -- can as of yet be counted on one hand. The company is burning cash, and unlike rival Joby Aviation, it still hasn't demonstrated its electric vertical takeoff and landing (eVTOL) craft in a piloted flight, only remote-controlled versions.

To top it off, Cathie Wood's Ark Invest dumped about 2.2 million Archer Aviation shares last week from several of its exchange-traded funds (ETFs).

Despite the market's doubts, Archer is in a better place today than it was last year. It has completed the third of four phases in the FAA's type certification process -- the first eVTOL company to do so -- and is taking part in the White House's eVTOL program. Investors who thought the company would be further along by this point were probably misinformed -- Archer has work to do, but it hasn't fallen behind.

The potential for enormous returns from Archer hasn't burned away. This stock could, over time, mint new millionaires. Here's how.

What the bull case for Archer Aviation looks like

On paper, the bull case for Archer Aviation stock punching your ticket to millionaire status is theoretically possible but highly unlikely without a sizable investment -- think tens of thousands, possibly even more.

To give you some perspective: A $25,000 investment at today's price (about $5.75 the last time I checked) would need Archer stock to gain 40-fold before the $1 million line is crossed. Assuming Archer has a $4.5 billion market value, a 40-bagger would make it worth about $180 billion. Note: This doesn't take into account the possibility of stock dilution, which would decrease your ownership in Archer and therefore the value of your investment.

What would Archer, carrying a $180 billion market, actually look like? Obviously, the regulatory hurdle -- attaining the as-yet-untouched FAA Type Certification -- would be a thing of the past. So would building a fleet of eVTOLs, thousands of aircraft, with operations in major cities worldwide.

In that bullish scenario, Archer would need a strong manufacturing arm, much bigger than the facility it built with Stellantis in Georgia, and it would need billions in annual revenue, with aircraft sales and air taxi services taking off. It would probably need to expand defense contracts beyond its current partnership with Anduril, too.

Image source: Archer Aviation.

In short, Archer would need to become one of the most, if not the most, dominant players in the eVTOL space across the globe.

Reality check: Archer is years away from that bullish scenario

Right now, Archer is still working through the FAA's regulatory process. It needs FAA Type Certification for its Midnight aircraft, which demonstrates that it is airworthy, and it also needs Production Certification, another mandatory safety certificate that demonstrates that its factories can consistently produce airworthy Midnight aircraft.

Assuming that Archer does get its certification ducks in a row, it then has to roll out commercial operations. In this regard, it has some help. The eVTOL Integration Pilot Program (eIPP), a White House-backed program, is designed to help companies like Archer roll out eVTOL deployments. It is only because of eIPP that Archer plans to launch operations in some U.S. cities in late 2026.

All things considered, Archer is still years away from cranking up sales. For aggressive investors who believe eVTOLs will populate future skies, however, now might be the time to buy the dip.

Steven Porrello has positions in Archer Aviation and Joby Aviation. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.