Archer Aviation Inc. (ACHR) shares edged higher in afternoon trading Thursday, steadying after a two-day decline that brought the stock close to its 52-week low. The move came as Cathie Wood's ARK Invest continued to reduce its position in the electric vertical takeoff and landing (eVTOL) company, selling more than 2.2 million shares across three exchange-traded funds earlier this week.
At last check, Archer shares were up about 0.5% to $5.08, recovering from a session low of $4.93. Trading volume exceeded 21.5 million shares, well above average, as investors weighed the implications of the ARK sales against the company's progress toward certification and commercialization. The stock had fallen 7.16% on Tuesday and another 5.08% on Wednesday, following Monday's close at $5.73.
ARK Invest Reduces Exposure
According to filings tracked by Investor's Business Daily, ARK Invest unloaded a total of 2,222,392 Archer shares, worth approximately $12.72 million based on Monday's closing price. The sales were spread across three funds: 953,336 shares from the ARK Innovation ETF (ARKK), 866,604 from the ARK Autonomous Technology & Robotics ETF (ARKQ), and 402,452 from the ARK Space Exploration & Innovation ETF (ARKX).
The selling by ARK, a high-profile investor in innovative technology, underscores the ongoing pressure on eVTOL stocks as the sector awaits clearer regulatory milestones and revenue generation. Barchart noted in a report Wednesday that ARK has been trimming its stakes in eVTOL companies, and while Archer remains better capitalized than some peers, it still faces significant headwinds.
Financial Position and Outlook
Archer's most recent quarterly update, released in May, showed first-quarter revenue of $1.6 million and a net loss of $217.7 million. Adjusted EBITDA loss for the quarter was $172.5 million. The company ended the period with $1.7759 billion in cash, cash equivalents, and short-term investments, providing a substantial runway as it works toward certification.
For the second quarter, Archer guided for an adjusted EBITDA loss in the range of $170 million to $200 million, reflecting continued heavy investment in development and testing. The company's cash position, totaling nearly $1.8 billion, is seen as a key buffer against the cash burn required to achieve certification and begin commercial operations.
FAA Certification Progress
The primary catalyst for Archer's stock remains progress with the Federal Aviation Administration (FAA). The company announced it became the first eVTOL manufacturer to complete Phase 3 of the FAA's four-phase type-certification process and is already advancing through Phase 4. Archer is currently conducting piloted vertical takeoff and landing (VTOL) and conventional takeoff and landing (CTOL) flights with multiple aircraft on an almost daily basis.
Founder and CEO Adam Goldstein stated in May that Archer has made "tremendous progress towards beginning operations in the US later this year." The company is also a partner in three of the eight projects selected for the U.S. Department of Transportation and FAA's Advanced Air Mobility (AAM) and eVTOL Integration Pilot Program, covering regions in New York/New Jersey, Texas, and Florida. The agencies have indicated that the public should start seeing operations as part of the program by summer 2026.
Analyst Views and Sector Context
Despite the recent share price weakness, analysts remain generally bullish on Archer's long-term prospects, though some have trimmed their price targets. Canaccord Genuity's Austin Moeller reiterated a Buy rating but lowered his price target to $12 from $13, citing near-term headwinds that have not altered his longer-term outlook.
The broader eVTOL sector saw declines earlier this week, with shares of Archer, Vertical Aerospace, and Joby Aviation all moving lower on Tuesday. Vertical Aerospace also announced that its new full-scale prototype completed its first piloted flight after receiving a fresh permit from the UK Civil Aviation Authority.
At current levels near $5, Archer trades as a volatile pre-commercial aviation stock rather than a traditional aerospace play. Key factors for investors include the timing of FAA milestones under the eIPP program, the potential for test operations to begin generating revenue, and whether the company's cash position will be sufficient to reach commercialization without additional shareholder dilution.
