Buying Archer Aviation Today Could Set You Up for Life

Imagine a city free from rush-hour traffic -- not a city that literally doesn't have cars (like, say, Venice), but one that has aerial forms of transportation, like flying cars.

That picture in your head is something that could become real in the next decade. The term for it is "urban air mobility." It won't look like The Jetsons or Back to the Future II -- that is, present-day cars that can hover and propel. Rather, urban air mobility will give us electric vertical takeoff and landing (eVTOL) aircraft, basically a combo of drone and helicopter. They will be quieter than helicopters, with a quick velocity that can reduce an hour of traffic to a 10-minute aerial hop.

The total addressable market of urban air mobility could become a trillion-dollar market, which opens an opportunity to invest in its start-ups. One of those start-ups is Archer Aviation (NYSE: ACHR) -- and it very much has the potential to set investors up for life.

Archer stock is still taxiing on the tarmac

Archer is one of the frontrunners in the eVTOL market. It is currently working on certifying its flagship aircraft, Midnight, which could potentially taxi passengers within urban hubs and to and from airports.

Image source: Archer Avation.

The bull case for Archer rests on its pushing Midnight successfully to the end of the FAA's regulatory timeline. The company has completed three of the necessary four phases -- it closed phase 3 in April 2026 -- and while it hasn't given a date for when it could hypothetically finish the fourth, it will likely take one to two years.

That said, Archer has been transforming its business profile, from an air taxi company to one with ambitions in defense and broader commercial aviation.

To that end, Archer has recently agreed to acquire three businesses from Boeing (NYSE: BA): Wisk, Insitu, and SkyGrid. Together, these three give Archer more exposure to autonomous eVTOL craft (Wisk), military drones (Insitu), and air traffic management (SkyGrid). Better still, one of these businesses, Insitu, is profitable, with over $200 million in annual revenue generated. For Archer, which brought in about $5 million last quarter, that additional $200 million could be significant to its growing costs.

Speaking of which, quarterly losses for Archer have been widening. That isn't surprising for a company that is spending heavily on certification and expansion, but it does raise the stakes for management's execution. It also raises the possibility that Archer will draw from equity financing, thereby diluting existing shareholders.

Plenty of blue sky ahead

The way to life-changing wealth for Archer investors is, doubtless, an FAA-certified Midnight. From there, Archer will have to scale production to make a fleet of air taxis, with enough aircraft to service major cities in the U.S. This will not happen overnight, and it could be many years before Archer is even generating revenue from its eVTOLs.

Archer is a speculative stock, which is a nice way of saying it lacks a strong business. It has dreams, plans, and big ideas, but no eVTOL or profits. By the same token, if it did have those latter two, the stock would not offer the same high-reward potential that it does today. That's a risk investors will have to accept if they want a shot at the upside.

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