Archer Aviation vs. MP Materials: Which Stock Is a Better Buy in 2026?

Choosing between Archer Aviation (NYSE:ACHR) and MP Materials (NYSE:MP) in 2026 requires balancing the high-growth potential of urban air mobility against the foundational role of rare earth materials in modern technology.

Archer Aviation aims to revolutionize short-distance travel with its electric vertical takeoff and landing aircraft, while MP Materials focuses on securing the domestic supply chain for magnets used in electric vehicles and defense systems. Both companies occupy critical niches but offer vastly different risk profiles for everyday investors.

The case for Archer Aviation

Archer Aviation develops electric aircraft designed for urban air-taxi services, positioning itself as a leader among industrial stocks focused on future transport. The company leverages a conditional purchase agreement with United Airlines for its Midnight aircraft and collaborates with the U.S. Air Force through the AFWERX program. It also maintains a strategic partnership with Stellantis to scale manufacturing and a joint development agreement with Anduril Industries for autonomous platforms.

In FY 2025, revenue reached nearly $300,000, which reflects a transition into the early stages of commercialization compared to zero revenue in the previous fiscal year. However, the company reported a net loss of close to $618.2 million for the period. This substantial loss is largely due to the high costs associated with aircraft development, testing, and the ongoing regulatory certification process required to fly commercial routes.

As of its December 2025 balance sheet, the debt-to-equity ratio is roughly 0.1x, which compares total debt from short term and long term sources to shareholder equity. The current ratio is close to 19.9x, indicating that the company has significant liquid assets available to cover its short term liabilities. Free cash flow for the year was a negative $511.7 million, representing the cash consumed by operations and capital investments during this pre-revenue growth phase.

The case for MP Materials

MP Materials serves as a vital link in the domestic supply chain, operating as the only integrated rare earth miner and magnet producer in the United States. Its strategic partnerships are substantial, including a foundational agreement with General Motors for electric vehicle magnets and a long-term supply contract with Apple. Additionally, the U.S. Department of War supports the company through a ten-year magnet offtake agreement and a direct equity stake to ensure domestic supply.

In FY 2025, revenue reached approximately $275.5 million, marking a growth rate of roughly 35.1% over the prior year. Despite this growth, the company reported a net loss of nearly $85.9 million and a negative net margin of approximately 31.2%. This performance reflects the capital-intensive nature of scaling midstream separation and downstream magnet manufacturing facilities in California and Texas.

As of its December 2025 balance sheet, the debt-to-equity ratio is approximately 0.4x. The current ratio is nearly 7.2x, suggesting the company maintains a strong ability to meet its short term debts with its current assets. Free cash flow was a negative $328.1 million, which is the cash remaining after the business pays for its operational activities and its significant capital expenditures on new processing infrastructure.

Risk profile comparison

Archer Aviation faces significant regulatory hurdles as it seeks type certification from the FAA, and any delays could materially postpone its commercial launch. The company carries a history of net losses and will likely require more capital to fund its manufacturing ramp-up and vertiport infrastructure. Additionally, it is currently engaged in trade secret litigation with Joby Aviation, which could divert management resources and impact its competitive position in the electric aviation market.

MP Materials is heavily dependent on its relationship with the U.S. Department of War, and any changes to those agreements could harm its financial position. The company also operates in a sector dominated by Chinese producers, making it vulnerable to geopolitical shifts and volatile trade policies. Furthermore, it faces execution risks in scaling its new facilities and is involved in intellectual property litigation against USA Rare Earth regarding proprietary technology.

Valuation comparison

While MP Materials trades at a lower P/S ratio, Archer Aviation appears less expensive when looking at its Forward P/E relative to future earnings estimates.

Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

I'd go with MP Materials, even though Archer Aviation is working toward something fascinating that could reshape urban transportation. Archer’s electric air taxi concept is ambitious, and its progress toward FAA certification is ahead of the rest of the eVTOL industry. But it is burning through enormous amounts of cash each quarter with almost no revenue to show for it yet, and commercial viability is still years away.

MP Materials is a completely different kind of story. What catches my attention is that it operates the only rare earth mine of scale in North America, and it is in the middle of a transition from raw materials producer to fully integrated magnet manufacturer. That shift is already showing up in the numbers, with revenue growing sharply and its magnetics business picking up major customers including General Motors and Apple. The Pentagon has also made a substantial investment in the company, recognizing that domestic rare earth production is a national security priority.

Archer might fly someday, but MP Materials is already building something the country needs right now, and it has the Pentagon's backing to prove it.

Sara Appino has positions in Apple and General Motors. The Motley Fool has positions in and recommends Apple and MP Materials. The Motley Fool recommends General Motors and Stellantis. The Motley Fool has a disclosure policy.