Where Will Archer Aviation Be in 1 Year?

Source The Motley Fool

Right off the bat, it should be noted that Archer Aviation (NYSE: ACHR) should be thought of as a risky investment that only aggressive investors will want to consider. But if the company can successfully execute one of its key 2025 initiatives, Archer could prove that its business concept has a long-term future.

Here's why you'll want to pay attention to where Archer Aviation is in one year if you are interested in this upstart airplane maker.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

What does Archer Aviation do?

A cynic might say Archer Aviation loses money. It, in fact, did that extremely well in 2024, posting red ink of more than half a billion dollars on the bottom line of its income statement. On a per-share basis, that amounted to a loss of $1.42, which was an improvement over 2023's $1.69 per-share loss. Don't get too excited by that, however, because the absolute loss was worse. The per-share loss was reduced because it was spread over more shares.

A balance showing risk and reward.

Image source: Getty Images.

That's not unusual for a start-up company, especially one attempting to build a capital-intensive business from scratch. It gets even harder when you add that Archer Aviation is attempting to create a product that doesn't exist in a highly regulated industry. In fact, even if management executes at the top of its game, the red ink will likely continue for years. Capital to fund the investment is vital, and stock sales are an effective means to raise it, even if it ends up diluting current shareholders. But what, exactly, is Archer Aviation attempting to do?

The company has built a vertical-lift, short-haul electric aircraft. For lack of a better description, it is an air taxi intended to move a small number of people over short distances. The early goal is to do this in congested cities, where flying over traffic will result in material time savings. Archer Aviation has a prototype and is working toward Federal Aviation Administration (FAA) approval. This is likely to be a multiyear, expensive effort. In 2025, the company is building 10 of its vehicles, a number of which will be used just for testing. Even though it is a necessary expense, every test vehicle is just more money out the door.

There's a key test of the company's business in 2025

But not all of those 10 aircraft will be used for FAA testing. Archer Aviation has inked a deal with Abu Dhabi Aviation (ADA) to launch the first air taxi service using the company's aircraft. It is important for Archer Aviation to get regulatory approval in the United States, of course. But the Abu Dhabi air taxi service is the first real test of the entire air taxi concept.

Archer Aviation is going all out to support the effort. According to the company's fourth-quarter 2024 earnings release, "In addition to the Launch Edition aircraft, Archer also plans to provide ADA with a team of pilots, technicians and engineers to support the initial operational ramp, helping ensure a safe and efficient deployment." Basically, Archer Aviation will be running the show at the start as it teaches Abu Dhabi Aviation how to use its aircraft.

There are a couple of big things to look for. First, investors will want to make sure the service gets up and running. This is a first-of-its-kind effort, so there is a chance that it will be harder to do than Archer Aviation believes. Second, you will want to see whether there's a sustainable demand for air taxis. Once again, this has never been done before, and whether people will want to pay for an air taxi is unclear.

Third -- and this one could be the most important -- Archer Aviation is using the start-up process as a template for future expansion. Wall Street will want to pay close attention to the lessons the company learns along the way and how they will inform its future plans. That notably includes Archer Aviation's own plans to build an air taxi service in the United States.

Investors will know a lot more about Archer Aviation in a year

It is highly unlikely that Archer Aviation will be a profitable company one year from now. But that won't mean it hasn't achieved a great deal with its business. In fact, if you are an aggressive growth investor interested in Archer Aviation, the next year could be a pivotal turning point for the company. And a huge amount will depend on getting the Abu Dhabi air taxi service up and running. If that happens successfully, the future could be up, up, and away for Archer Aviation.

Should you invest $1,000 in Archer Aviation right now?

Before you buy stock in Archer Aviation, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Archer Aviation wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $672,177!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of March 24, 2025

Reuben Gregg Brewer 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.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Elon Musk is doing nothing to stop Tesla’s downfallTesla sales are collapsing worldwide, and Musk’s chaotic leadership and focus on political power plays are doing nothing to stop the downfall. The start of 2025 has been troubling, particularly in Europe, where Tesla saw a 45% drop in new registrations in January compared to the same period in 2024, with further declines in February. […]
Author  Cryptopolitan
Mar 24, Mon
Tesla sales are collapsing worldwide, and Musk’s chaotic leadership and focus on political power plays are doing nothing to stop the downfall. The start of 2025 has been troubling, particularly in Europe, where Tesla saw a 45% drop in new registrations in January compared to the same period in 2024, with further declines in February. […]
placeholder
Ethereum Price Forecast: Whales increase buying pressure as developers set April 30 for Pectra mainnet upgradeEthereum (ETH) has seen immense buying from whales on Thursday following core developers fixing April 30 as a tentative date for the Pectra upgrade to go live on mainnet.
Author  FXStreet
Mar 28, Fri
Ethereum (ETH) has seen immense buying from whales on Thursday following core developers fixing April 30 as a tentative date for the Pectra upgrade to go live on mainnet.
placeholder
XRP Price Fate Hangs on $2.00—Major Move Incoming?XRP price started a fresh decline below the $2.20 zone. The price is now showing a few bearish signs and might decline below the $2.050 level. XRP price started a fresh decline after it failed to
Author  NewsBTC
Mar 31, Mon
XRP price started a fresh decline below the $2.20 zone. The price is now showing a few bearish signs and might decline below the $2.050 level. XRP price started a fresh decline after it failed to
placeholder
Gold hits fresh all-time high ahead of Trump’s reciprocal tariff deadlineGold price (XAU/USD) shots higher at the start of the trading week and hovers around $3,120 at the time of writing on Monday.
Author  FXStreet
Mar 31, Mon
Gold price (XAU/USD) shots higher at the start of the trading week and hovers around $3,120 at the time of writing on Monday.
placeholder
Nvidia stock sinks 4% as Trump’s tariff plans rattle AI tradeNvidia shares fell over 4% early Monday after US President Donald Trump delivered a stern message about trade tariffs. Trump said on Sunday that no country would be given any special treatment regarding tariffs. He also signed new trade policies into effect on April 2, which he calls “Liberation Day.” This frightened investors, who had […]
Author  NewsBTC
12 hours ago
Nvidia shares fell over 4% early Monday after US President Donald Trump delivered a stern message about trade tariffs. Trump said on Sunday that no country would be given any special treatment regarding tariffs. He also signed new trade policies into effect on April 2, which he calls “Liberation Day.” This frightened investors, who had […]
goTop
quote