Could Buying Archer Aviation Stock Today Set You Up for Life?

With each passing day, the vision of flying taxis is becoming closer to reality, and Archer Aviation (NYSE: ACHR) is one company at the forefront of this revolutionary transportation technology. With plans to roll out its commercial service later this year, Archer could be on the brink of a big breakthrough that could transform urban transportation as we know it.

Adding to the excitement, U.S. President Donald Trump recently backed initiatives to accelerate drone development across the country -- a boost that could prove beneficial for Archer and others in the electric vertical take-off and landing space.

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Over the past year, Archer's stock has increased by about 200%, driven by a slew of positive news. With promising developments on the horizon, could investing in Archer Aviation set you up for life? Let's take a closer look at the company and its long-term prospects.

How Archer Aviation aims to redefine travel

Archer is leading the way in electric vertical take-off and landing (eVTOL) aircraft, also known as flying taxis. These vehicles can launch and land vertically, like helicopters, but utilize advanced battery technology for fully electric operation, resulting in quieter use -- making them ideal for urban travel.

The company recently benefited from positive news when Trump signed an executive order to "unleash American drone dominance." The order aims to accelerate the development, testing, and scaling of American drone technologies, including advanced air mobility and autonomous flight.

In addition to its commercial air taxi service, Archer has partnered with Anduril Industries to adapt its aircraft for military use, including reconnaissance and logistics operations, providing another avenue for future growth.

Evaluating Archer Aviation's long-term prospects

According to a report published by MarketsandMarkets, the urban air mobility (UAM) market is projected to reach $23.5 billion by 2030 and $41.5 billion by 2040. Some estimates are more optimistic, with one report from J.P. Morgan projecting that the UAM market could grow into a $1 trillion industry by 2040.

Archer Aviation could position itself as a bridge between traditional airlines and rideshare services like Uber. The company aims to launch its air taxi service in the United Arab Emirates later this year, with expansion to major cities such as New York and Los Angeles coming in the next couple of years. The company could also find itself competing for defense contracts as the U.S. ramps up drone production.

Image source: Archer Aviation.

For Archer to set up investors for life, several things would have to go right. For one, the company still requires regulatory approval from the Federal Aviation Administration (FAA), which is currently underway. Not only that, but it will take time for the mainstream to accept this form of travel as safe and reliable and embrace air taxis.

Archer would need to grow into a major player in the global urban air mobility market, scale its production, and maintain profitability while continuously innovating its eVTOL aircraft. It must continue to advance battery technology, safety measures, and autonomous flying capabilities. It also needs to expand the vertiport infrastructure and scale up manufacturing, while maintaining profitability.

Not only that, but it would also need to generate tens of billions in annual revenue and have robust margins to warrant a significantly higher valuation.

Is Archer Aviation right for you?

Archer Aviation has solid potential and is a Moon-shot play, should things work out. However, investors buying today would need to exercise extreme patience, because it could take decades of holding the stock for it to produce outsize returns. Much of this hinges on Archer's success early on and its ability to build on that success and become a major player in the growing eVTOL industry.

It could be a bumpy ride. That's why it's vital that any investment in Archer Aviation (or any other up-and-coming speculative stock) is just a small part of a larger financial plan.

As a long-term investor, the most important thing you can do is focus on consistently saving money and building up your retirement accounts and investment portfolios, ensuring your investments are diversified across companies of different types, with Archer being a small part of the pie.

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Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.