It's True: Cathie Wood's ARK Invest Has Been Loading Up On This Aviation Stock. Is It a No-Brainer Buying Opportunity?
Key Points
Cathie Wood's Ark Invest has been buying Archer Aviation stock for multiple ETFs that it manages.
Archer is a risky and highly speculative stock -- but it could have big upside.
- 10 stocks we like better than Archer Aviation ›
Ark Invest CEO Cathie Wood has made a name for herself as an influential growth investor. When growth stocks are in a bull market phase, her tech- and innovation-focused exchange-traded funds (ETFs) have tended to produce very strong returns. As a result, some investors have been paying close attention to moves that the famous growth investor makes across her company's ETFs.
Archer Aviation (NYSE: ACHR) has positioned itself as a leading player in the still-nascent electric vertical take-off and landing (eVTOL) space. In August, Ark Invest purchased roughly $3.15 million worth of Archer stock across three of its funds -- ARK Innovation ETF, ARK Space Exploration & Innovation ETF, and ARK Autonomous Technology & Robotics ETF. The stock purchases across these ETFs came after Ark made a cumulative investment of approximately $40 million in June.
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Is Archer Aviation a great long-term buy?
As of this writing, Archer Aviation has a market capitalization of approximately $7.2 billion. Meanwhile, the business is still in a pre-revenue state. Alternatively, Archer could be poised to begin commercial operations for its Midnight eVTOL aircraft in the United Arab Emirates in the near future.
Along similar lines, the company recently announced that it had secured a partnership with Korean Air to launch its Midnight eVTOL craft in Korea. Archer has also been selected as the Los Angeles Sports and Entertainment Commission's official air-taxi partner and the air-taxi partner for the 2028 Los Angeles Olympics.
Perhaps even promising than Archer's play in the commercial aviation space, the company has been making some big bets and scoring key partnerships in the defense industry. The company has secured a potentially transformative partnership with defense-tech innovator Anduril, and the Trump administration has signaled it plans to offer significant support for the eVTOL industry.
Archer's heavily growth-dependent valuation and the uncertain growth trajectory for the broader eVTOL market mean it wouldn't be right to classify the stock as a "no-brainer." On the other hand, the stock could be a good fit for growth investors with a high tolerance for risk.
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Keith Noonan has positions in Archer Aviation. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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