TLDR
- Archer Aviation stock jumped following an exclusive partnership with Karem Aircraft to enhance VTOL capabilities with military-grade technology
- The company maintains a $6 billion order backlog and holds $1.6 billion in cash as of Q3 2025
- FAA certification remains pending for both passenger operations and production scaling, creating timeline uncertainty
- Archer burns approximately $400 million annually while analysts project $306 million in revenue by 2027
- Main competitor Joby Aviation appears closer to obtaining necessary FAA certifications
Archer Aviation shares climbed higher this week after announcing a new defense partnership. The eVTOL maker secured an exclusive deal with Karem Aircraft to boost its vertical takeoff and landing technology using military-grade systems.
The partnership comes at a critical time for Archer. The company sits on a $6 billion order backlog but still can’t carry paying passengers. It doesn’t have the green light from the FAA yet.
Archer’s Midnight aircraft can carry four passengers plus a pilot. The craft travels up to 100 miles on a single charge. Its 12-tilt-six propeller configuration allows it to lift like a helicopter and cruise like an airplane.
That design makes it quieter and more efficient than traditional choppers. The company wants to fly short routes between airports and city centers. Think of it as an Uber for the skies.
Cash Burn Creates Pressure
The company closed Q3 with $1.6 billion in cash and short-term investments. But it’s burning through about $400 million each year. That gives Archer roughly four years of runway at current spending levels.
Shares have dropped 22% this year. The stock has traded below $10 since late October. The market clearly has questions about whether flying taxis will actually take off.
Archer has lined up heavy-hitter partners. United Airlines has placed orders. Stellantis helps with manufacturing. The company also has deals to launch operations in the UAE, India, and South Korea.
But none of that matters without FAA approval. Archer needs two key certifications. One allows it to fly paying passengers. The other lets it ramp up production of Midnight aircraft.
Rival Inches Ahead
Here’s the problem: Joby Aviation looks closer to getting those same approvals. That puts pressure on Archer to catch up. Both companies are racing through the same regulatory maze.
The FAA launched an eVTOL Integration Pilot Program in September. The program aims to speed up safe eVTOL operations across the United States. If this fast-tracks Archer’s certification, the current stock price could look like a bargain later.
Analysts expect revenue to start flowing by 2027. Some estimates put that year’s sales around $306 million. But those projections assume Archer clears the regulatory hurdles and scales production successfully.
The stock carries real risk right now. Archer is pre-revenue and burning cash. It’s building aircraft for a market that doesn’t technically exist yet. The company is designing the future of urban transportation, but that future hasn’t arrived.
Archer has the ingredients: a massive backlog, blue-chip partners, and international expansion plans. The Karem Aircraft partnership adds military-grade technology to the mix. Defense contracts could open up a new revenue stream beyond commercial air taxis.
The company’s current market cap sits around $6 billion. That values the business at roughly the same size as its order backlog. Either the market is pricing in serious execution risk, or the stock is undervalued for patient investors.
Archer continues working through the FAA certification process while expanding its partnership network and defense capabilities through the new Karem Aircraft collaboration.
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