Why Archer Aviation Stock Is Soaring Today

Archer Aviation (NYSE: ACHR) stock is making big gains in Wednesday's trading. The flying taxi company's share price was up 8.4% as of 3 p.m. ET. Meanwhile, the S&P 500 index was down 1%, and the Nasdaq Composite index was down 1.1%.

Archer Aviation stock is moving higher today thanks to bullish coverage from Cantor Fitzgerald. The firm maintained an overweight rating on the stock and raised its one-year price target from $10 per share to $13 per share. As of this writing, the new price target suggests additional upside of roughly 30%.

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Archer surges on new price target

Last week, Archer Aviation CEO Adam Goldstein said that he expected commercial flights for the company's Midnight flying electric vehicles would begin in 2025. Adding another bullish catalyst, Archer announced that it had entered into a partnership with Anduril for the development of flying vehicles for the defense industry.

On the heels of this news, Cantor Fitzgerald published fresh coverage on the stock before the market opened this morning and raised its one-year price target on the stock from $10 per share to $13 per share. Some on Wall Street are even more bullish. Last Friday, Deutsche Bank published coverage maintaining a buy rating on Archer and setting a one-year price target of $15 per share, which represents potential upside of roughly 50% as of this writing.

What's next for Archer Aviation?

Archer Aviation has been on a hot streak lately, with positive coverage from analysts and new partnerships helping to push the company's share price up 134.5% over the last month. With the business still in a pre-revenue state, it's fair to say that the stock is a high-risk investment candidate. On the other hand, things appear to be moving in the right direction for the business.

Archer Aviation has continued to rack up successful test flights and partnerships laying the foundations for rapid adoption of its Midnight flying taxis if and when regulatory approvals are granted in key markets. While regulatory roadblocks could emerge and cause dramatic sell-offs for the company's stock, there seems to be a good chance that the company's vehicles will see their first commercial operations next year.

Even better, the push into developing crafts for the defense industry has opened up a new growth avenue that could prove to be a massive long-term performance driver. So while the stock comes with a relatively high degree of risk, it also still has explosive upside potential even on the heels of recent gains.

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Keith Noonan 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.