Why Joby Aviation Crushed the Market Today

The U.S. federal government provided quite a strong tailwind for Joby Aviation (NYSE: JOBY) on Tuesday, and thanks to that, the company's shares gained quite a bit of altitude that day. They climbed nearly 13% higher in price on the news, and in doing so, they trounced the essentially flat-lining S&P 500 index.

A monster lift from the FAA

That day, the Federal Aviation Administration (FAA) introduced an official new category of air transport under its jurisdiction that it's calling powered lift. That includes services such as cargo delivery and passenger air taxi, the segment in which Joby specializes with its purpose-designed electric vertical take off and landing (eVTOL) aircraft.

In making the move, the FAA -- best known as the federal regulator of the airline industry -- has finalized the qualifications and trainings that both instructors and pilots are expected to obtain. It also stipulates numerous requirements for the operations of such machines.

The regulator said that powered lift is its first new category of aircraft in almost 80 years.

Understandably, Joby was enthusiastic about this major development in its specialty. It quoted its founder and CEO JoeBen Bevirt as saying, "The regulation published today will ensure the U.S. continues to play a global leadership role in the development and adoption of clean flight."

An uncertain future

While the FAA's move is a giant step forward for both next-generation air transport services generally and Joby specifically, bear in mind that it's still very early days for the powered lift industry (to use the FAA's new terminology). As a business, Joby still has to prove that it can be a viable and, eventually, profitable operator in this still-wide open space.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $21,294!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $44,736!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $416,371!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of October 21, 2024

Eric Volkman 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.