Why Joby Aviation Stock Plummeted 15.1% Last Month and Has Kept Sinking in September

Key Points

• Joby stock fell last month after its Q2 report arrived with a wider-than-expected loss.

• The company's valuation was also pressured by macroeconomic concerns and trends in the AI space.

• Joby completed a demonstration exercise for autonomous defense applications this month, but the stock has kept sliding.

• 10 stocks we like better than Joby Aviation ›

Joby Aviation (NYSE: JOBY) stock saw a substantial pullback in last month's trading. The company's share price fell 15.1% across the period, according to data from S&P Global Market Intelligence. Meanwhile, the S&P 500 rose 1.9% across the stretch, and the Nasdaq Composite rose 1.6%.

The electric vertical takeoff and landing (eVTOL) specialist's share price saw pullbacks in conjunction with the publication of its second-quarter results. The stock also headed lower as investors took a more cautious approach to defense artificial intelligence (AI) plays. Sell-offs have continued in September's trading.

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Joby stock slipped on Q2 results and other catalysts

Joby published its second-quarter results after the market closed on Aug. 6 and reported a wider-than-anticipated loss for the period. While the average analyst estimate had called for a per-share loss of $0.19 in the period, the business's actual loss came in at $0.41 per share.

Joby is still in a pre-revenue state, and its transition to commercialization hinges on achieving regulatory approvals for its eVTOL crafts in key markets. During the company's Q2 conference call, CEO JoeBen Bevirt indicated that the company was making significant progress on certification and manufacturing initiatives -- but the wider-than-expected loss prompted some investors to move out of the stock.

In addition to the loss posted in Q2, Joby's valuation took a hit as investors became more risk-averse in response to a handful of catalysts last month. A report from the Massachusetts Institute of Technology (MIT) raised questions about practical applications for AI, and some concerning inflation indicators also tamped down on the market's appetite for high-risk stocks.

While many companies operating at the intersection of defense and AI have seen strong gains this year, the defense AI trend also lost some steam last month. Despite posting strong Q2 results early in August and enjoying subsequent valuation gains, Palantir stock wound up seeing pullbacks later in the month -- and the trend extended to other companies that have otherwise benefited from defense AI trading momentum.

What's next for Joby Aviation?

Joby's share price has continued to head lower in September's trading, with shares down 5.2% in the month as of this writing. Despite gains for the broader market connected to expectations that the Federal Reserve is gearing up to cut interest rates this month, the eVTOL stock hasn't been able to participate in the bullish momentum.

Earlier this month, Joby completed a successful demonstration of its Superpilot flight system for the autonomous piloting of a Cessna 208 aircraft. The trial involved the Cessna 208 being flown 7,000 miles over more than 40 flight hours using Joby's autonomous navigation technologies.

While the successful trial hasn't been enough to push Joby stock into positive territory this month, the demonstration represented another positive indicator for the company's opportunities in defense-industry applications and commercial flights. Joby remains a high-risk, high-reward investment play, but the company has continued to make meaningful progress along some important lines.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.