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Why I Think Archer Aviation Is Poised for a Breakout

July 3, 2025
06:30 AM
4 min read
AI Enhanced
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Wall Street sees Archer Aviation (ACHR 0. 15%) as just another electric flying taxi company burning cash while chasing FAA certification. Yes, the risks are real -- certification delays, massive cash...

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4 min read

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investment

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Published

July 3, 2025

06:30 AM

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Wall Street sees Archer Aviation (ACHR 0. 15%) as just another electric flying taxi company burning cash while chasing FAA certification

Yes, the risks are real -- certification delays, massive cash burn, fierce competition, and the challenge of scaling a new form of aviation

But that narrow view completely misses what's really happening here: Archer is quietly building the most valuable defense aviation asset outside the traditional primes -- and a major acquisition or corporate restructuring could soon expose this hidden value

Here's a deeper look at why I think these forces are building to drive a major breakout in the stock in the not-so-distant future

Image source: Getty Images

The White House just changed everything Trading around $10 with a market cap near $5. 4 billion at the time of writing (July 1, 2025), Archer has dered impressive returns, up over 245% in the past three years

But those gains pale compared to what's coming

In June 2025, ing President Trump's executive order establishing an eVTOL Integration Pilot gram, Archer raised $850 million at $10 per, bringing its total liquidity to an industry-leading $2 billion

This wasn't just another funding round

The White House explicitly aims to establish U. "dominance" in eVTOL nology through its new Integration Pilot gram

The timing is perfect -- Archer serves as the Official Air Taxi vider for the Los Angeles 2028 Olympics, creating a high-file deadline for commercial deployment

CEO Adam Goldstein called the executive order a "seminal moment" -- and he's right

Un competitors burning through capital with single-market strategies, Archer's dual apach and $2 billion war chest vide multiple paths to fitability

While well-funded competitors Joby Aviation (JOBY 0. 39%) pursue both civilian and military, Archer has assembled something unique: an exclusive defense partnership combining its hybrid-electric vertical takeoff and landing (eVTOL) nology with Anduril's autonomous systems and Palantir nologies' (PLTR 1. 67%) artificial intelligence (AI) infrastructure

This triumvirate represents a $100 billion-plus opportunity that doesn't require FAA certification

The defense disruption play Yes, both Archer and Joby have defense contracts

But Archer's apach is fundamentally different

The late-2024 Anduril partnership creates a hybrid-pulsion aircraft specifically for military use -- not adapted civilian aircraft

This matters because hybrid systems offer ext range and payload capacity that pure electric vehicles can't match right now

More importantly, Anduril brings its Lattice AI platform, already integrated into hundreds of military systems

Combined with Palantir's March 2025 partnership for AI-powered aviation software, Archer offers the Pentagon something unprecedented: a fully integrated, AI-enabled vertical lift capability from three of defense 's hottest companies

The partnership targets a "gram of record" -- Pentagon-speak for guaranteed multiyear funding

These contracts can reach billions annually

With defense demand "stronger than expected," according to Goldstein, the company aims to build early hybrid-pulsion defense totypes soon, distinct from its Midnight commercially oriented aircraft

The split scenario unlocks everything Here's where it gets interesting

Archer could unlock massive value through a corporate split, separating its commercial and defense operations

This solves multiple blems at once: Stellantis, with its substantial stake in Archer, wants to focus on commercial air mobility -- not get entangled with defense contractors

A split allows the commercial division to pursue the $1 trillion urban air mobility market with Stellantis and United Airlines, backed by the White House pilot gram

Meanwhile, the defense division -- supercharged by Anduril and Palantir -- becomes an attractive acquisition target for Northrop Grumman (NOC 0. 83%) or other defense primes

Northrop has explicitly prioritized AI, autonomous systems, and next-generation aviation

The aerospace giant's Orbital ATK acquisition ($9. 2 billion total in 2018) ved its ability to integrate cutting-edge aerospace assets, expanding capabilities in solid rocket motors, missile systems, and space nologies

Multiple paths to value Archer isn't waiting for corporate action

The company ders its first piloted Midnight aircraft to Abu Dhabi Aviation this summer

Manufacturing has begun at its Georgia facility, targeting two aircraft per month by year-end

The Palantir partnership adds another layer, AI-powered air traffic systems worth billions

With a forma liquidity position of $2 billion, Archer has industry-leading financial resources to execute on both opportunities simultaneously

Wall Street still prices it primarily as a pre-revenue eVTOL company, largely ignoring its defense potential

But with Anduril recently beating Boeing for major contracts and White House backing, the market's dismissive attitude is changing

When investors recognize Archer's transformation from flying taxi company to critical defense asset, today's $10 stock will look the bargain of the decade

After all, defense stocks tend to sport premium valuations and stellar free cash flows

George Budwell has positions in Archer Aviation, Joby Aviation, Northrop Grumman, and Palantir nologies

The Motley Fool has positions in and recommends Palantir nologies

The Motley Fool recommends Stellantis

The Motley Fool has a disclosure policy.