Archer Aviation (NYSE:ACHR) closed Friday at $4.64, down 2.1% for the session and 2.7% lower on the week, as the stock continued to retreat from the surge that followed its July 20 defense partnership announcement. The shares have now surrendered roughly 77% of the dollar gains posted after the Thunder unveiling, underscoring waning investor enthusiasm for the military-focused initiative.
The two-week chart tells a clear story: after closing at $4.44 on July 17, Archer jumped 19.6% to $5.31 on July 20, the day it introduced Thunder in collaboration with defense technology firm Anduril. By the end of July, the stock had settled at $4.64, a gain of just 4.5% from the pre-announcement level. That leaves only 23% of the original surge intact, a sharp reversal that raises questions about the durability of defense-driven catalysts.
Defense contracts have been touted as a way to accelerate revenue. At the Farnborough Airshow, CEO Adam Goldstein highlighted the appeal: “The time to field can be much shorter, and if you win a program there is known money at the end of the contract,” he said, according to Reuters. Thunder, an unmanned hybrid-electric aircraft designed for defense and logistics missions, is still in testing with full-scale surrogate models, with the first flight planned for 2027.
But the market's reaction suggests that near-term execution matters more than long-term potential. Archer's weekly performance lagged rival Joby Aviation (NYSE:JOBY) by 5.9 percentage points, with Joby gaining 3.2% over the same period. That divergence challenges the notion that defense exposure alone can support the stock.
Adding to the pressure, the civil certification process is moving more slowly and costing more than initially projected. Cantor Fitzgerald analyst Andres Sheppard noted that some investors are showing reduced patience. Strong balance sheets remain crucial in the interim, and both companies are burning cash as they await certification milestones.
Archer's cash position is substantial: $1.776 billion in cash and short-term investments at the end of Q1, representing about 49.9% of its current market value. Joby holds $2.5 billion, or 37.1% of its market cap. But when stripping out cash, Archer's equity value is just $1.78 billion versus Joby's $4.25 billion—a 58% gap that cannot be explained by funding alone.
Operational metrics reveal a broader divergence. In Q1 2026, Archer generated just $1.6 million in revenue, compared to Joby's $24.2 million—a 15-fold difference. Both companies burned similar amounts of operating cash ($149.1 million for Archer, $144.4 million for Joby), but Archer's capital expenditures were lower at $32.6 million versus Joby's $77.9 million, bringing total cash use to $181.7 million versus $222.4 million.
Archer expects a Q2 non-GAAP adjusted EBITDA loss of $170 million to $200 million, with a midpoint of $185 million—7.2% worse than Q1. Certification remains the key civil milestone: Archer has completed Phase 3 of the FAA's four-step process, with Phase 4 testing ongoing. Joby announced that its first FAA-conforming aircraft for Type Inspection Authorization completed its first flight in Q1.
Investors will get fresh catalysts this month. Joby reports Q2 earnings on August 5, followed by Archer on August 10. Focus will be on revenue, cash burn, and certification progress. Thunder's first flight, planned for 2027, remains a longer-term event. Until then, Archer's stock is likely to remain sensitive to news flow and execution updates.
Risks remain elevated: certification delays, test setbacks, supplier disruptions, or missed contract deadlines could pressure shares. Additional capital raising could dilute current shareholders. For now, the market views Archer as having financial backing but yet to demonstrate tangible results.
