Archer is chasing a trillion-dollar opportunity.
Archer has reached significant milestones.
Risks remain sky high.
When investors think about disruptive transportation, electric cars are often the first to come to mind. But another technology is starting to capture headlines: flying taxis. Archer Aviation (NYSE: ACHR) is one of the most prominent companies working to make this futuristic idea a reality. Backed by UnitedAirlines and Stellantis, Archer has gained enough momentum to attract attention across Wall Street.
The company has not yet produced meaningful revenue, and the risks remain sky high. But recent progress suggests Archer deserves a closer look.
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Archer designs and builds electric vertical takeoff and landing (eVTOL) aircraft. These battery-powered planes are designed for short trips of 20 miles, such as airport transfers or commutes from downtown to the suburbs.
Its flagship aircraft, Midnight, can carry four passengers plus a pilot. Archer plans to operate an air taxi network in partnership with airlines, rideshare platforms, and governments. Unlike a traditional aerospace business that primarily sells planes, Archer aims to generate recurring revenue by running the service itself. Investors can think of its long-term aim as becoming the Uber of the sky. It also aims to sell aircraft to third parties selectively -- United Airlines and the U.S. Air Force are two parties that have agreed to buy the aircraft from Archer.
The potential market is enormous. Morgan Stanley estimates that urban air mobility could become a $1-trillion market by 2040, with further growth to $9 trillion by 2050. While these numbers remain predictions for now, they do indicate the massive potential ahead.
Archer does not need to dominate the sector to carve out a valuable business. It just needs to make sure it remains one of the key players.
Archer has not yet reached commercialization, but it has delivered progress that lends it more credibility than many of its early stage peers.
Each of these milestones reduces risk and shows that Archer is building momentum toward commercialization.
While there are many positive developments for Archer, investors should acknowledge that investing in this industrial company remains a speculative endeavor.
First, the company has zero revenue yet spends hundreds of millions of dollars to get the aircraft to commercialization. In the first six months of 2025, the company used $198 million in operating cash flow and an additional $34 million in investing cash flow.
The company reported $1.7 billion in cash and cash equivalents at the end of June 2025, which should cover its operations for the next three years -- assuming there's no increase in burn rate. However, scaling up production and launching a commercial service will require significantly more capital. Archer will likely raise additional funds through debt or equity down the road.
The regulatory path also carries uncertainty. The FAA has never certified an eVTOL aircraft. Any delay in Midnight's approval could push Archer's launch well past its target.
In a way, Archer's stock represents a binary bet: Either the company clears the regulatory and technical hurdles to become a leader, or it fails to reach scale before its cash runs out.
Archer Aviation has positioned itself as a frontrunner in the race to launch flying taxis. Its partnerships with United Airlines, Stellantis, and the U.S. Air Force provide credibility and resources. At the same time, its progress on certification and manufacturing shows that the company is advancing beyond the concept stage.
At the same time, Archer faces long odds. With no revenue, a significant cash burn, and an uncertain regulatory path, the company's future remains uncertain.
For investors with a long horizon and tolerance for volatility, Archer represents a fascinating dark horse in a potentially massive new industry. For most investors, however, the smarter move is to keep Archer on the watchlist until its Midnight aircraft -- and its business model -- truly take flight.
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Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.