Archer Aviation (NYSE:ACHR) is taking to the skies in more ways than one. After a difficult year filled with lots of volatility, the electric vertical take-off and landing (eVTOL) startup has an important new investment. Automaker Stellantis (NYSE:STLA) has announced a new investment to the tune of $55 million in Archer, following the company’s recent flight test milestone. The eVTOL maker has already received this new funding package and ACHR stock has been rising steadily all day on the news.
This isn’t the first influx of cash that Acher has received from Stellanis, but it certainly puts the company in an excellent position to continue growing as its industry continues to expand.
Is Archer finally on the verge of a turnaround? The scrappy startup is still fighting to recover from a hard year of mostly trending downward. But the company is showing investors that it is on the right track to start making up the ground it has lost.
What’s Happening With ACHR Stock
After surging as markets opened this morning, ACHR stock has managed to stay on an upward trajectory. As of this writing, it is up 9% for the day and will likely close out the day even higher. The stock seems to have successfully bucked the volatility that it has been battling for weeks. This could easily be the catalyst that sends it out of penny stock territory and safely above the $5 mark.
Stellantis has been backing Archer since 2021, although it has been a strategic partner since 2020. In 2023 alone, it invested a total of $110 million in the startup through both open market ACHR stock purchases and investments made through its strategic funding agreement. Now, Archer is showing notable progress. In June 2024, one of its vehicles successfully completed a transition flight that reached 100 miles per hour. CEO Adam Goldstein issued the following statement on the new investment:
“The commitment by Stellantis to Archer has been unrivaled, from its foresight to provide the manufacturing expertise and capital needed to accelerate Archer’s business objectives, to the strategic vision and steadfast support from Stellantis CEO Carlos Tavares. Together, we’re working to redefine urban transportation, opening new worlds of opportunity for citizens across the globe by providing more efficient access to people, places, and events across the regions they live in.”
Now, the two companies are in an excellent position to continue growing. The eVTOL market is expected to expand at a compound annual growth rate (CAGR) of 25% between 2024 and 2030. Experts such as InvestorPlace senior investment analyst Luke Lango have flagged 2024 as a year that flying car stocks will take off, with Archer helping usher in this new era.
What Comes Next
Some investors have approached Archer Aviation with caution. The company’s startup status makes some people nervous. Additionally, the eVTOL sector is still new and still developing.
However, ACHR stock is making notable progress and continuously reminding investors why they shouldn’t disregard it. Last month, it received certification from the Federal Aviation Administration (FAA) to operate a commercial airline. July has already begun, and a key source of new funding has been confirmed.
More Stellantis cash is exactly what Archer needs to continue its slow ascent pack to the green. ACHR stock may still seem like a contrarian play, but there’s no denying that its recent performance has been promising.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
