We have been fantasizing about flying cars for thousands of years. Our imaginations have often painted futuristic cityscapes with cars hovering above us, much like in “The Fifth Element” or “Blade Runner” (although we crave a less Cyberpunk future than depicted in this film). These visions of a sky filled with flying vehicles have inspired us to envision a world where urban air mobility is a reality. It’s little wonder, then, that Archer Aviation (ACHR) is garnering plenty of attention with its upcoming line of vehicles called “Midnight,” an electric vertical takeoff and landing (eVTOL) aircraft. Many people, not just on Wall Street, follow closely every step it takes and every announcement it makes.
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Although Archer Aviation is on track to begin commercial rides in 2025, the company’s stock has declined significantly by over 15% since the start of 2025. This raises the question: Why is ACHR stock down despite the promising advancements?
Let’s explore three key factors that could be influencing this trend.
Plans for 2025 Flying Taxis Are Ahead of Schedule
Archer Aviation is at the forefront of the technological eVTOL industry with its Midnight aircraft. The company aims to revolutionize urban air mobility by offering safe, sustainable, and quiet flying taxis. In 2024, Archer scheduled 400 test flights and not only met the number but exceeded it, completing 402 flights by the end of August, four months ahead of schedule. The company also aims to increase the build rate to two aircraft per month by the end of the year at their Georgia plant. Despite these advancements, the stock’s performance is influenced by the broader market sentiment and the challenges of certifying and commercializing new technology.
Biden’s New Restrictions Could Have an Effect
One of the primary reasons for Archer Aviation’s recent decline is the geopolitical tensions and new restrictions imposed by the Biden administration. The U.S. has expanded restrictions on exporting AI chips and semiconductor manufacturing equipment to countries like China, Russia, Iran, and North Korea. These restrictions have raised concerns in the market, causing a sell-off of growth stocks like Archer Aviation. Investors worry that increasing geopolitical tensions might negatively affect stocks, making it harder for Archer to get the necessary components and materials.
Increased regulatory scrutiny also comes into play with the growing tension between the U.S. and China. This might slow down the certification process for the Midnight eVTOL aircraft, impacting Archer’s timeline for commercial launches.
Wall Street Sentiments
Analyst opinions on Archer Aviation are mixed. Canaccord analyst Austin Moeller, a four-star analyst, is optimistic about Archer’s prospects, citing potential catalysts in 2025, such as FAA certification progress, manned flight tests, and favorable policies for AAM networks. Moeller raised his price target on ACHR to $14, maintaining a Buy rating. On the other hand, JPMorgan (JPM) analyst Bill Peterson downgraded the stock to “Hold” from “Buy” due to concerns about overvaluation after a significant rally. Peterson’s cautious outlook reflects the volatile nature of the stock’s outcome, hinging on securing certification for its eVTOL aircraft.
Additionally, ACHR stock scores a 7 on TipRanks’ Smart Score, meaning a neutral rating, indicating a balanced sentiment among investors and analysts.
Is Archer Aviation a Good Stock to Buy?
According to Wall Street, Archer is a Strong Buy. The average price target for ACHR stock is $11.38, implying a 38.44% upside potential.
conclusion
While Archer Aviation is making impressive progress toward launching its Midnight eVTOL aircraft in 2025, the stock’s recent decline can be attributed to geopolitical tensions, market sentiment, and mixed analyst opinions. Overall, the company is on track to fulfill our destiny of crossing the city by air, but the closer it gets, the harder it is to believe it’s actually going to happen.
