Archer Aviation Stock Dips Below $10: Buy Opportunity?

The initial investor euphoria surrounding Archer Aviation’s (ACHR) involvement in the White House’s eVTOL Integration Pilot Program (eIPP) has swiftly given way to a sobering market correction. After a 6% surge on the announcement, shares have retreated, dropping 4% in a single morning session to fall below the psychologically important $10 threshold to $9.53. This pullback appears to be a classic case of profit-taking, digesting the gains from a recent 15% two-week rally fueled by the eIPP news and a successful 55-mile test flight of Archer’s Midnight aircraft. The program itself, while symbolically significant, was revealed to be more of a framework than a firm commitment, lacking concrete timelines, funding details, or a guaranteed slot for Archer, leaving the initial celebration feeling premature.

Broader sector headwinds are exacerbating the decline. A short-seller report from Grizzly Research earlier this month cast a long shadow, labeling Archer the ‘Nikola of the skies’ and questioning the validity of its $6 billion order book as well as the feasibility of its certification timeline. This skepticism was echoed by analysts at Zacks, who recently downgraded the stock to a ‘Hold’ rating based on a dimmer earnings outlook. Compounding these concerns are Archer’s fundamental financials: a second-quarter net loss of $206 million and its pre-revenue status remind investors that this is a company burning significant cash long before it generates a single dollar of sales.

Archer Aviation’s entire future hinges on a single, critical milestone: achieving FAA type certification for its Midnight aircraft, currently targeted for late 2025. This approval is the essential gateway to unlocking commercial operations, which the company hopes to begin in 2026. The eIPP could provide a crucial testing ground next year, allowing for demonstration flights in partner cities like Los Angeles, where Archer is slated to be the air taxi provider for Team USA during the 2028 Olympics. These pilots are vital for proving the aircraft’s quiet operation and 100-mile range in real-world urban environments.

To finance this ambitious sprint, Archer is leveraging a substantial war chest. A recent $850 million capital raise, bolstered by an executive order from President Trump, has swelled its cash reserves to approximately $1.7 billion. This capital is being deployed for a manufacturing ramp-up at its facility in Georgia and for continued refinement of its battery technology. The company’s strategic partnerships form another key pillar of its strategy. A firm order for 200 aircraft from United Airlines (UAL) provides a demand anchor, while the manufacturing expertise of automaker Stellantis (STLA) is crucial for production scaling. Furthermore, defense deals, such as those with the UAE, offer a potential avenue for revenue diversification beyond urban passenger transport.

Investing in Archer Aviation at this stage is unequivocally a speculative wager. As a pre-revenue company in a nascent industry, it carries significant risk. The path to certification is fraught with potential delays, which are common in aviation and could severely test investor patience. Even with certification, questions remain about market adoption, including public acceptance and the economic viability of $200-plus rides in a potentially squeezed consumer economy.

However, the potential reward is equally massive. Bulls point to projections of a $9 trillion urban air mobility market by 2040. At its current price below $10, some analysts argue Archer’s valuation of roughly 3x projected 2028 sales looks cheap compared to peers like Joby Aviation (JOBY). The average analyst price target of $13 suggests a 33% upside from current levels, and firms like Cantor Fitzgerald maintain a ‘strong buy’ rating, betting on a rebound if upcoming test flights impress. For investors considering buying this dip, the decision boils down to risk tolerance. With daily volatility around 6%, the stock is suited only for those comfortable with significant swings. A prudent approach would be to cap any investment in ACHR to a small percentage of a portfolio’s speculative allocation, balancing it with more stable assets while awaiting concrete proof that the eVTOL industry is truly ready for takeoff.