Why Archer Aviation Stock Is Taking Flight Today

Shares of electric air taxi company Archer Aviation (NYSE: ACHR) rose 12.5% as of 1:11 p.m. ET today for no obvious reason, but as tech stocks rebounded overall and one of Archer's key partners recently announced new funding.

No quit for tech

Despite turbulence last week after President Donald Trump announced potential new tariffs, investors continue to buy the dip on tech stocks. The Nasdaq Composite (NASDAQINDEX: ^IXIC) had gained over 1% as of this writing.

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Over the weekend, President Trump announced 25% tariffs on all steel and aluminum imports. Trump's previously announced tariffs on China also reportedly went into effect at midnight on Sunday. Treasury yields moved up slightly, but expectations for inflation continue to be mixed.

A New York Federal Reserve study showed that consumers expect inflation to hold steady at 3% over the next one to three years. However, consumers in a University of Michigan survey reported Friday said they expect inflation to revert higher all the way to 4.3% over the next year.

After the close of trading Friday, one of Archer's new key partners, Anduril, a start-up specializing in defense, announced it is raising as much as $2.5 billion in a new round of financing that values the company at $28 billion. Archer announced a new partnership with Anduril in December to develop a new aircraft that could potentially be for the Department of Defense.

A risky but fun investment

Archer Aviation has excited much of the investor community with its plan to use electric air taxis to ease traffic congestion and provide a trendy new way to travel. The company's partnership with Anduril is exciting because it could lead to government contracts as soon as this year, which would be a big step for the pre-revenue company.

Still, with Archer having already reached a multibillion-dollar valuation, I would start slowly with the investment and lean in more as the company reaches new milestones.

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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.