Archer Aviation stock has moved into a bear market, moving from the October high of $14.60 to the current $8.42. This retreat happened as sentiment among investors in the eVTOL industry faded. This article explores whether the stock has more upside or downside this year.
Archer Aviation is gearing towards major milestones
Archer Aviation is a top player in the electric vertical takeoff and landing (EVTOL) industry, where it is building products for commercial and defense solutions.
The company’s flagship product is Midnight, which will be able to carry four passengers, a payload of 1,000 pounds, and a range of above 100 miles.
Archer has achieved a lot of progress over the years as analysts predicted that the industry will continue doing well over time. One analyst estimated that the air taxi business will make over $30 billion annually in 2032, much higher than what it is making now.
Therefore, the industry will be dominated by a few key companies because of the lengthy and expensive process of launching an air taxi. In this case, the top companies to watch will be Archer Aviation and Joby Aviation, which will likely launch their commercial products in 2026 and 2027.
Archer Aviation has made major milestones in the past few years, with the Midnight plane reaching 55 miles and reaching an altitude of 10,000 ft. The certification by the Federal Aviation Authority (FAA) will likely be provided later this year or in 2026.
Archer Aviation is also working with other regulators, including the United Arab Emirates (UAE), one of the top players in the industry. It is also working with other countries like Japan, Indonesia, and South Korea.
Archer Aviation has also achieved other major milestones, including receiving millions of dollars from Stellantis, the parent company of Jeep and Chrysler. One approach for the funding is that it will provide it with manufacturing funds, which will be reimbursed through share issuances.
The company’s fundraising helped it end the third quarter with over $1.6 billion in cash and short-term investments. Its results showed that its net loss came in at $129.9 million, a $76 million improvement from the same period a year earlier.
Major risks and opportunities ahead
Archer Aviation stock price faces major risks and opportunities ahead. The most important opportunity is that it will receive authorization by the FAA, which will allow it to start making money in the United States and other countries.
Archer has also made major deals with other countries, including Saudi Arabia, one of the most important markets. At the same time, the company acquired control of Hawthorne Airport.
However, the company faces other potential risks, including the fact that the short interest has jumped to 12.35%, much higher than other companies, including Joby Aviation’s 6%.
Another risk is that it will likely continue diluting its shareholders. Its outstanding shares have jumped to 651 million, up sharply from 170 million in 2022.
Archer Aviation stock price technical analysis
The three-day chart shows that the ACHR stock price rebounded from a low of $2.81 in September to a high of $14.65 in October last year.
It is now consolidating at the 100-day Exponential Moving Average (EMA). On the positive side, it has formed a bullish flag pattern, which is made up of a vertical line and a channel.
It is now slightly above the lower side of the channel. Therefore, chances are that it will rebound and possibly retest the channel’s upper side of the channel at $14.70.
READ MORE: Archer Aviation stock warning: why experts call it ‘an invitation to your funeral’
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