Archer aviation (NYSE: ACHR ) The stock has been on an incredible hot streak lately. Thanks to a combination of bullish coverage from analysts, news about its commercial flight plans, and attention-grabbing news that the company is entering the defense industry, Archer Aviation stock is now up 291% over the past three months.
But while the company’s Market capitalization At nearly $5 billion, the company is still not posting any revenue. With that kind of valuation and speculative outlook, it’s not unreasonable to wonder if Archer’s stock has already gotten too high for investors to take big wins.
On the other hand, I think the company’s share price can continue to fly higher and provide wins for long-term investors who buy shares at today’s prices.
As exciting as the company’s opportunities in the private sector are, its recent foray into the defense industry may have even more potential. On December 12, Archer announced that it had formed a partnership with Enduril to build flying electric vehicles (EVs) for the defense industry. Enduril is a defense company focused on innovative technologies that has already won US defense contracts. Then on December 22 Financial Times published a report suggesting that Anduril and Palantir were teaming up to form a consortium of next-generation technology companies capable of disrupting the defense industry.
Archer Aviation’s commercial operations appear to be on the verge of being cleared for takeoff, and that’s just the beginning of potentially huge opportunities in the defense space. So even though the company has managed to post explosive valuation gains despite still being in a pre-revenue position, there are good reasons to think the stock still has a huge run for long-term growth.
The market for flying defense-industry EVs is still in its infancy, and Archer’s leading position opens the door to potentially big stock gains.
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