Prediction: Buying Archer Aviation Today Could Set You Up for Life

Here's a million-dollar question for you: Would you pay $200 to avoid an hour or so of traffic? To get to an airport, maybe, or to make an appointment that wouldn't be possible if you traveled by car?

Regardless of how you answered, Archer Aviation (NYSE: ACHR) believes there are enough people in the world answering that question in the affirmative to justify the capital and effort needed to bring air taxis to the market.

With Tesla recently demonstrating an actual flying car, the question of Archer's long-term potential is coming to the fore again. Could you still become wealthy from the nascent eVTOL (electric vertical takeoff and landing) industry? Could buying Archer Aviation stock today set you up for life?

I think so. In fact, I believe Archer could make some of its long-term shareholders very wealthy, even if its commercial passenger business never takes off. Here's what I mean.

Image source: Archer Aviation.

Beyond air taxis: How Archer is diversifying its business

For starters, let me clarify something: When I say Archer Aviation could make investors wealthy without air taxi services -- that is, using an eVTOL to shuttle passengers around cities -- I don't mean to suggest that those commercial services lack enormous potential. They do. At the same time, Archer doesn't need to fly passengers to make money. Instead, it could sell the aircraft to air taxi service providers. This, I think, could combine with other opportunities to make Archer a strong business, regardless of whether it's actually taxing people in the sky.

The first of these opportunities stems from its recent acquisition of companies from Boeing (NYSE: BA). In a nutshell, Archer is planning to take three subsidiaries off Boeing's hands -- Wisk Aero, Insitu, and SkyGrid -- in exchange for a 19.75% equity stake. Each of these businesses brings something new to Archer: Wisk brings autonomous flight technology; Insitu brings an established, profitable military drone business; and SkyGrid brings software for managing air traffic.

What interests me here is that I think Archer could eventually make money in three areas: building and selling aircraft; selling autonomous flight technology; and managing airspace.

Another opportunity for Archer is in defense. Its partnership with Anduril is the clearest example of this: Both companies have developed an autonomous aircraft platform designed for military applications. If successful, Archer could tap into a lucrative market where demand is driven by national security and paid for by governments rather than dependent on consumers' willingness to pay for an air taxi.

How buying Archer today could set you up for life

My prediction is that within the next decade, Archer will become a major manufacturer of next-generation aircraft and autonomous aviation technology, with a business worth several times its current valuation. My argument here is that even without a commercial passenger air-taxi service, Archer looks poised for serious growth.

Implied, of course, is a further argument: With revenue from commercial passenger services, Archer's growth could be exponentially large.

Becoming that company will, of course, require patience, time, and probably some luck. But for investors who can hold a speculative stock for a decade or longer, I believe Archer could become one of those rare investments that could genuinely change one's future.

Steven Porrello has positions in Archer Aviation. The Motley Fool has positions in and recommends Boeing and Tesla. The Motley Fool has a disclosure policy.