Archer Aviation (NYSE:ACHR) is leading the charge in shaping the air taxi market – an ambitious endeavor that requires vision, technological expertise, and a significant tolerance for risk to create the industries of the future.
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Though yet to turn a profit, ACHR shares have been on quite the bull run during the last few months of 2024, thanks to expanding partnerships, regulatory progress vis-à-vis the FAA, and the upcoming launch of a high-volume manufacturing facility in Georgia in the early part of 2025.
More recently, however, the stock has faced downward pressure. This decline followed the company’s announcement of a planned share doubling, an industry-wide downgrade from J.P. Morgan, and rising geopolitical concerns stemming from U.S. export restrictions of AI chips to certain markets.
While acknowledging the myriad of risks, top investor Josh Arnold is ready to jump in.
“Early signs of buyers and partners are encouraging, and if by the end of this year it looks like Archer is going to be able to create a significant backlog of orders, I think $8 will have looked like a bargain,” asserts the 5-star investor.
Arnold acknowledges that this is a highly speculative investment, with the viability of the eVTOL market remaining an open question. He references J.P. Morgan’s assessment from last week, in which the investment firm stated that the industry’s hype was overstated.
“To be clear, Archer is operating at the fringes of what transport means, so it’s unclear how big the market for it really is today,” the investor emphasizes.
Another looming issue is the company’s finances, as it is still operating in the red. The investor notes that while ACHR seems to have enough cash on hand to finance three to four quarters of operations, further shareholder dilution is a likely scenario.
And yet, Arnold finds the prospects for the eVTOL market quite enticing. “I think of Archer as the nicest house in an up-and-coming neighborhood; it has a lot of potential, but also a lot of risk it doesn’t work out,” the investor sums up.
Intrigued by the possible bonanza, Arnold rates Archer Aviation shares a Buy. (To watch Arnold’s track record, click here)
Wall Street also seems ready to take a chance on Archer Aviation. With 6 Buy recommendations and 2 Holds, ACHR earns a Strong Buy consensus rating. The stock’s 12-month average price target lands at $11.38, suggesting a 29% upside potential within the coming year. (See ACHR stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
