The Dip Is Here. Here's Whether to Buy Archer Aviation or Walk Away.

Archer Aviation (NYSE: ACHR) is an aviation company trying to turn a sci-fi idea into reality: flying cars -- or, rather, flying taxis. Think of it as the ridehailing company of the skies. If it succeeds, you might one day call a giant drone-looking craft from your phone to taxi you through the air to and from the airport.

That day might come sooner than originally expected. Thanks to the White House-backed eVTOL Integration Pilot Program, Archer is preparing for early Midnight operations through partners in Florida, Texas, and New York as soon as the second half of 2026. True, that's not the same as full commercial service under FAA type certification, which Archer currently lacks. But successful flights in this program could give regulators a closer look at its aircraft in flight, not to mention offer investors a glimpse into how its air taxi service could work in real-world conditions.

Despite the good news, Archer Aviation stock is trading well below its former highs. Before you buy the dip, however, there's one thing to consider.

Archer still has one big technical milestone to showcase

Archer is a frontrunner in the development of electric vertical takeoff and landing (eVTOL) aircraft. These aircraft can lift and land vertically like a helicopter, but fly forward like a small airplane.

The physics of these eVTOLs is quite impressive. The rotors allow them to take off and land vertically, which means they do not need a runway. Once the aircraft transitions into forward flight, its wings generate lift, much like an airplane. This reduces the burden on the rotors, which allows the eVTOL to fly more efficiently.

In theory, the eVTOL's physics could solve one of the biggest economic problems with helicopters: They're useful, but expensive to maintain and operate. If a company like Archer can scale its eVTOL craft, a fleet of these flying taxis could operate like urban transportation, putting time-crunched travelers above congested streets on a short urban hop.

Image source: Archer Aviation.

That's the promise of physics. The problem, however, is that eVTOL technology has not been proven as a commercial transportation system. It's one thing to show that an eVTOL aircraft can work in a controlled test environment. It is quite another to prove that it can operate safely and reliably in urban airspaces. That's why the Federal Aviation Administration (FAA) hasn't punched Archer's certification ticket with undue haste, as it has to be confident the technology will work before letting customers hop on board.

Which brings me here: Unlike Joby Aviation, Archer has not yet publicly demonstrated a piloted transition flight. By that, I mean a flight in which a pilot manually shifts from vertical takeoff to forward flight. It has, to be sure, demonstrated that its Midnight aircraft can make the transition; it has also showcased a conventional takeoff and landing using a runway. But it has not showcased a pilot physically in the cockpit, manually commanding the aircraft to transition from liftoff to forward motion.

That's a pretty big gap in this prospective eVTOL maker's timeline, and it is one investors should watch closely. Until Archer publicly demonstrates a piloted transition, Joby Aviation seems like the "safer" eVTOL stock right now -- at least from a technical standpoint.

Steven Porrello has positions in Archer Aviation and Joby Aviation. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.