This eVTOL Stock Could Set Early Investors Up for Life

Archer Aviation (ACHR) has been a disappointing stock for the author, but recent developments are making them reconsider their position. The company is focusing on three areas beyond its air taxi business: defense, autonomous technology, and electric vertical takeoff and landing (eVTOL) development. One of these areas, autonomous technology, seems particularly promising.

Boeing (BA) sold three businesses to Archer in exchange for 19.75% of Archer's shares and two warrants worth $100 million each. The most significant of these is Wisk, which is developing eVTOL aircraft for autonomous flight. Wisk's technology could eliminate the need for pilots, reducing operating costs by up to 27% compared to traditional flights. This could significantly improve Archer's profitability, especially given its current cash burn rate.

Another business, SkyGrid, provides software for air traffic management, and Insitu builds drones. While these are valuable, Insitu's revenue of $200 million annually is dwarfed by Archer's second-quarter revenue of $5 million. Thus, Insitu's cash flow benefits Archer's short-term cash situation, but Wisk's autonomous technology is the more promising long-term investment.

If Archer can successfully develop and deploy autonomous eVTOLs, it could become one of the most efficient and profitable businesses in the eVTOL industry. This, of course, depends on obtaining FAA certification, but if Archer succeeds, early investors would have a significant advantage. However, the author notes that Archer is not currently on the list of top 10 stocks recommended by the Motley Fool Stock Advisor, indicating a potential investment opportunity.