Archer Aviation Stock Advances Amid eVTOL Development and Stellantis Partnership Expansion

Archer Aviation Stock Advances Amid eVTOL Development and Stellantis Partnership Expansion

Archer Aviation Inc. (ACHR) shares have experienced substantial upward movement, reflecting growing investor optimism surrounding its advancements in electric vertical takeoff and landing (eVTOL) technology and strategic partnerships. The stock rose 27.0% in the past week and 46.4% over the last 30 days, culminating in a remarkable 319.5% return over the past year. This performance has placed ACHR near its 52-week high of $13.92, currently hovering around the $11-$12 range.

Strategic Alliance with Stellantis Fuels Manufacturing Ambitions

A significant catalyst for the recent investor confidence is the expanded strategic partnership with Stellantis N.V. (STLA). This collaboration includes a memorandum of understanding (MOU) detailing a commitment from a newly formed Stellantis subsidiary to invest approximately $400 million into Archer's manufacturing efforts. This investment encompasses approximately $372 million for manufacturing labor and up to $20 million in initial capital expenditures. The objective of this alliance is to scale the production of Archer's Midnight aircraft, targeting an annual capacity of 650 units by 2030, with initial production aiming for two aircraft per month by year-end 2025. The first high-volume eVTOL factory, a joint effort between Archer and Stellantis, was completed in Covington, Georgia, in early 2025. This partnership underscores Archer's commitment to rapidly advancing its commercialization timeline.

Market Dynamics and Valuation Considerations

The market's positive reaction is rooted in the perceived long-term potential of Archer's urban air mobility strategy, despite its current pre-revenue status. While the company's valuation multiples, such as a forward Enterprise Value to Sales (EV/Sales) of 4,522.95x and a forward Price/Sales of 5,682.29x, are exceptionally high for traditional industrial firms, they are characteristic of nascent, high-growth aerospace innovators where future scalability is the primary driver of investment.

A Discounted Cash Flow (DCF) analysis suggests an intrinsic value of $29.81 per share for ACHR, implying it is 58.2% undervalued compared to its current trading price of approximately $12.46. This model projects Free Cash Flow to turn positive by 2028 and reach $1.53 billion by 2035. Archer's Price/Book (P/B) ratio stands at 4.8x, which is considered favorable against its peer average of 10.4x, though higher than the broader U.S. Aerospace & Defense industry average of 3.6x.

The company maintains a strong liquidity position, with approximately $1.7 billion in cash and cash equivalents as of mid-2025, providing an estimated two to three years of operational runway at its current burn rate. This robust balance sheet offers crucial support as Archer continues its significant research and development investments, which contributed to Q2 2025 operational expenses of $176 million and net losses of $206 million.

Broader Industry Context and Operational Progress

Archer's progress within the eVTOL sector is marked by its dual-track approach to commercialization. Domestically, it is actively pursuing FAA type certification, having secured three of four required operational certifications, including the Part 135 Air Carrier Certificate, Part 145 Repair Station Authorization, and Part 141 Pilot Training Academy Certification. The final Part 142 certification for flight simulation training devices is under review.

Internationally, Archer is making strides towards commercial launch, with flight trials of its Midnight aircraft already underway in Abu Dhabi, UAE, targeting commercial operations as early as late 2025. The company has also forged significant international deals, including a massive agreement in Indonesia for air taxi routes and a $500 million partnership with Japan Airlines and Sumitomo's joint venture, Soracle.

Beyond civilian applications, Archer's defense posture is expanding. The company acquired Overair's DARPA-rooted tiltrotor patents and specialized engineers, aligning with its 2024 partnership with Anduril to develop autonomous-capable hybrid eVTOLs for the U.S. military. This positions Archer to potentially capitalize on the Pentagon's $13 billion budget for autonomous systems.

While Archer's stock has demonstrated considerable strength, it has also been susceptible to speculative volatility, as evidenced by a brief surge and subsequent drop in early October 2025 following unfounded rumors of a partnership with Tesla (TSLA). This highlights the speculative nature of investment in the nascent eVTOL market.

Expert Perspectives and Outlook

Analyst sentiment remains largely optimistic, with a "Strong Buy" consensus and an average 12-month price target of $13.14, suggesting a potential 41.59% upside. Cathie Wood's Ark Invest has shown conviction in Archer's long-term growth narrative, with the stock forming over 2% of its combined portfolio. Conversely, some, like CNBC's Jim Cramer, have expressed caution, labeling the rapid price movement as "a bridge too far," citing the company's pre-revenue status and high market capitalization.

Looking ahead, Archer's trajectory hinges on several critical factors. The successful acquisition of the final FAA Part 142 certification and the timely commencement of commercial operations in both international markets and eventually the U.S. are paramount. Continued progress in manufacturing scale-up with Stellantis and the maturation of its defense contracts will also be key performance indicators. The eVTOL market, projected to reach $1 trillion by 2040 by Morgan Stanley, presents substantial long-term growth potential, though investors will monitor execution risks, potential certification delays, and the company's cash burn rate.