As market enthusiasm for high-risk growth stocks cools—particularly for companies with unproven business models—electric vertical takeoff and landing (eVTOL) aircraft manufacturer Archer Aviation (ACHR) is facing a severe test of its share price. The stock has fallen 23% over the past six months and, since hitting a high of $14.62 last October, has now retreated approximately 55% from its peak.
It may still be a considerable amount of time before the company begins generating revenue, and in the meantime, its losses are mounting. Does Archer’s stock carry the risk of further declines, or does the current significantly reduced price present a noteworthy buying opportunity for investors seeking growth stocks?
For investors, the wait for Archer to obtain certification and launch its air taxi service has been a lengthy process, but 2026 could genuinely be the year the dream becomes reality. The company states that its goal is to begin carrying passengers in its Midnight aircraft this year. This would be a monumental milestone for the company, and if all goes well, this eVTOL company would attract significant market attention.
However, generating substantial revenue may take longer. Last year, the company’s total operating expenses amounted to $730 million, a 43% increase from the previous year, primarily due to ramping up production. As the company seeks to scale its operations, costs are likely only to rise further in the coming years.
As one of the early leaders in the eVTOL field, Archer’s growth opportunities are attractive. The global market is expected to see tremendous growth in the coming years. Analysts at Grand View Research project the market to achieve a compound annual growth rate (CAGR) of 54.9% by the end of this decade. If Archer can capitalize on these growth opportunities, it could ultimately become a highly sought-after growth stock.
However, the path ahead is not without challenges and obstacles. Even if the company generates significant revenue in the future, it may not translate into profits in the short term. Considering that valuations for eVTOL stocks are already quite high (Archer’s market capitalization is slightly below $5 billion, while competitor Joby Aviation’s is nearing $10 billion), the risk is that these stock prices may have already priced in excessive optimism.
Last Tuesday (March 3rd) was an underperforming day for Archer Aviation, CoreWeave (CRWV), and Tesla (TSLA). Amid a generally sluggish market for growth stocks, these three stocks saw declines ranging from 3% to 11%. Notably, renowned investor Cathie Wood did not stand idly by; her firm, Ark Invest, bought shares of all three companies during the day’s price decline.
This followed the company’s fourth-quarter earnings report. The fledgling eVTOL standout saw its stock price drop after releasing its latest financial data. While this represents a real loss for investors, the market reaction was somewhat expected. Archer is still a company not generating revenue. Operating expenses are rising as it expands its “Midnight” aircraft fleet and test flight programs. Concerns about its cash burn rate persist, but this stock shouldn’t typically experience drastic swings based on short-term financial results. As long as its plans remain on track—with Archer continuing to target its first passenger-carrying flights later this year—the stock price should be driven by significant progress announcements, not just the numbers on its income statement.
The road to developing a premium air taxi service is bound to have bumps. Concerns are also mounting about the actual market demand for expensive, short-range aircraft that carry only one pilot and four passengers. However, bullish catalysts do exist. The U.S. Air Force is exploring the role of Archer’s “Midnight” aircraft in military operations. And in two years, Archer could even become a household name as the official air taxi provider for the 2028 Los Angeles Olympics.
