Archer Aviation Pops Again. Can It Keep Gaining?

Archer Aviation (NYSE: ACHR) stock surged to close out 2024, and the electric vertical takeoff and landing (eVTOL) aircraft company is starting off 2025 on the right foot as well.

The stock jumped Friday morning, seemingly in response to reports that the U.S. could restrict Chinese drones, which would favor U.S. companies like Archer.

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As of 10:53 a.m. ET, the stock was up 19.8% on the news.

Image source: Getty Images.

Archer is climbing again

Archer Aviation stock caught fire shortly after the election as one of several meme stocks that have soared in recent weeks. The company is still in development stage with no revenue, but the drone-like transportation that it and Joby Aviation are working on could be here sooner than investors think, as early as this year.

Today, the stock seemed to get a boost after Bloomberg reported that the Biden administration was considering steps to "limit or ban Chinese drones in the U.S." Commerce Secretary Gina Raimondo also said that unmanned aerial systems technology is critical to national security.

Is Archer Aviation a buy?

Preventing competition from China could help Archer over the long run, but the issue doesn't seem immediately relevant to the stock, and it could be a distraction to focus on it.

Archer still needs to reach commercialization and has not yet demonstrated proof of concept as a business. Currently, the use cases for eVTOLs seem fairly limited, as they are designed for short-haul flights in cities, but are constrained by specific takeoff and landing locations.

While the stock may continue to rise on support from meme stock traders, long-term investors are better off waiting for the company to deliver real financial results before jumping in.

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Jeremy Bowman 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.