Prediction: Buying Archer Aviation (ACHR) Stock Today Could Set You Up for Life

Archer Aviation (NYSE: ACHR), a developer of electric vertical takeoff and landing (eVTOL) aircraft, went public through a merger with a special purpose acquisition company (SPAC) on Sept. 17, 2021. Its stock opened at $9.90 per share, but it now trades at about $6.

Archer's stock slumped after it missed its own production targets and posted steep losses. It's only manufactured two eVTOLs so far, compared to its original targets of producing ten eVTOLs in 2024 and 250 eVTOLs in 2025. In 2025, it generated less than $1 million in revenue (from agreements and small milestone payments) but posted a net loss of $618 million.

That seems like a bleak situation for a company with a market cap of $4.85 billion. But if Archer overcomes its growing pains, it might generate massive gains for its patient long-term investors.

Image source: Archer Aviation.

Why does Archer have a lot of upside?

Archer's Midnight eVTOL can carry a single pilot and four passengers, travel up to 100 miles, and reach a maximum speed of 150 miles per hour. It promotes these aircraft as a greener, safer, and easier-to-land alternative to conventional helicopters.

Archer's indicative (non-committal) backlog swelled to $6 billion with pending orders for roughly 1,200 aircraft at the end of 2025. Stellantis (NYSE: STLA), Archer's largest investor, will help the company ramp up its production as its exclusive contract manufacturer.

Archer's early customers include United Airlines and Abu Dhabi Aviation, which plan to use its eVTOLs for last-mile "airport to home" air taxi flights; and Andruil, which is co-developing a hybrid eVTOL defense aircraft with the company.

Those seem like niche markets, but Exactitude Consultancy expects the global eVTOL market to expand at a 23.5% CAGR from 2025 to 2034. That growth could be driven by the increasing usage of eVTOLs for air taxi, cargo transport, emergency, and military services. More organizations will also likely replace their aging helicopters with energy-efficient eVTOLs.

What will happen over the next few years?

Archer faces three near-term challenges. First, it needs the Federal Aviation Administration (FAA) to approve its first commercial flights. However, it's still unclear when it will complete that lengthy, multi-stage process. Second, it needs to launch its first revenue-generating commercial flights in Abu Dhabi -- but the Iran war could disrupt those plans. Lastly, it must ramp up production and keep pace with formidable competitors like Joby Aviation (NYSE: JOBY).

Assuming Archer checks those boxes, analysts expect its revenue to surge to $482 million in 2028. If it continues to grow at a 20% CAGR through 2036, its revenue would reach $2.07 billion by the final year. If it's trading at 20 times sales, its market cap would rise nearly ninefold to $42 billion over the next decade -- and it could soar even higher as the eVTOL market expands and evolves.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.