Why Archer Aviation Stock Soared This Week

Archer Aviation (NYSE: ACHR) stock posted big gains over the last week of trading. The flying electric vehicle (EV) specialist's share price closed out the week's trading up 10%, according to data from S&P Global Market Intelligence. Meanwhile, the S&P 500 index ended the week down 2%, and the Nasdaq Composite index closed out the period down 2.3%.

Even though the broader market saw big sell-offs after the Federal Reserve gave a more hawkish forecast for interest rates in 2025, Archer Aviation managed to close out last week's trading up big. The flying electric vehicle (EV) specialist saw big gains thanks to an announcement about its manufacturing outlook.

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Archer Aviation battles through turbulence and posts gains

Like most of the stock market, Archer Aviation stock saw big sell-offs in conjunction with the Fed's policy meeting on Wednesday. While the central banking authority announced the 25-basis-point rate cut that the market expected, Chair Jerome Powell issued new guidance for next year that roiled the market. Rather than reiterating its previous forecast for four cuts of 25 basis points next year, the Fed now expects that there will be only two cuts of that size. But Archer subsequently delivered some bullish news and was able to close out the week's trading up double digits.

After the market closed on Thursday, Archer published a press release announcing that it had completed construction and received the certificate of occupancy for its manufacturing plant in Georgia. The company said that it expects to begin producing its Midnight flying EVs at the beginning of 2025. By the end of next year, management expects that the plant will be producing two aircrafts a month.

What's next for Archer Aviation stock?

With this past week's gains, Archer Aviation stock is now up 54.5% across 2024's trading and has a market capitalization of roughly $4.1 billion. With the business still in a pre-revenue state, it's fair to say that the company has a highly growth-dependent and speculative valuation. The flying taxi specialist also still needs to get regulatory approvals to begin commercial operations for its Midnight vehicles.

On the other hand, Archer says that it already has $6 billion in orders for its Midnight flying taxis. With CEO Adam Goldstein recently stating that he expects to begin commercial flights next year, there seems to be a visible path to receiving the necessary regulatory approvals. Sales could ramp rapidly from there.

Additionally, Archer has recently announced that its entering the defense industry. The flying vehicle specialist is partnering with defense-tech innovator Anduril to develop aircraft for military applications. With Midnight's commercial debut potentially in sight and new growth opportunities in the defense space, Archer Aviation stock could continue to see strong bullish momentum.

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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.