Forget a wild year, it’s been a wild couple months in the stock market. As we look to close out 2024, stocks that have been seen as potential beneficiaries of Donald Trump’s recent presidential election win have outperformed. And while most investor attention is being directed toward the most obvious choices such as Tesla (NASDAQ:TSLA) due to the cozy relationship between CEO Elon Musk and president-elect Trump, there are other sectors of the economy that could perform very well moving forward investors may want to pay attention to.
24/7 Wall Street Key Points:
- Archer Aviation remains among the top eVTOL stocks in the market, and looks poised to see some sort of regulatory approval take place over the next year.
- For investors looking to invest in what could be the future of urban mobility, this is a top stock idea for 2025 that may be worth considering.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.
The electric vertical takeoff and landing (eVTOL) sector is one that’s started to garner significant attention. These hovercraft, often viewed as “flying cars” by many, have been touted as the future of modern urban transportation. However, years of delays in gaining approvals and billion-dollar valuations based mostly on prototypes has many investors still on the sidelines. Without a meaningful timeline to adoption, these companies’ valuations had come under pressure heading into the election.
However, with Donald Trump’s election victory has come a wave of euphoria that various tech-focused sectors may be unshackled by the bureaucratic and regulatory red tape that’s typically associated with getting approvals for revolutionary new technologies. And in the world of eVTOLs, Archer Aviation (NASDAQ:ACHR) remains a top pick. Aside from commercial operations, the company has launched its Archer Defense program and recently secured an additional $430 million in capital via an equity raise, so there are other catalysts investors are watching with this company right now.
Here’s why I think Archer Aviation could be the stock to own in 2025.
A Big Partnership Could Be a Game Changer
In addition to the company’s aforementioned catalysts, perhaps the biggest catalyst on the horizon I think investors may want to hone in on is the company’s recently-announced partnership with Anduril to create a hybrid gas-and-electric VTOL for defense use. This hybrid eVTOL is slated to be built at Archer’s Georgia factory where it’s also ramping up production of its Midnight electric VTOLs.
Currently, the expected launch date for Archer’s Midnight eVTOL still stands at 2025. But if this partnership can generate traction for its key clientele – the U.S. military – this could be a meaningful near-term catalyst for the stock, given the likelihood that defense spending may be the one are of the budget that is most likely to increase under president Trump in the coming years.
This hybrid model has been chosen due to its potential for enhanced speed, range, and payload capabilities suited for defense, while maintaining the advantages of electric systems such as reduced noise and thermal footprint. So, we’ll have to see what comes of this key development. Anduril currently supplies drones to Ukraine and will provide software for this hybrid aircraft, with Archer benefiting not only from the company’s military expertise but also its recent $1.5 billion capital raise to accelerate military tech production.
This move comes following news that Archer’s CEO Adam Goldstein once again reiterated the company’s commercial flight debut timeline of 2025, pending regulatory approvals. On this news, Deutsche Bank raised its price target for Archer Aviation from $11 to $15, citing strong growth potential in its defense industry push. I think these catalysts are real, and are certainly worth pricing into one’s valuation model right now.
Archer Aviation Looks Like an Intriguing Speculative Buy
In my view, Archer looks like an intriguing speculative buy this coming year, for those bullish on the Trump administration doing what it says it will do on the regulatory front. If robotaxis and other technologies are given the green light to proceed, it would set a harsh precedent to force other companies with innovative technologies who have been waiting on the sidelines patiently for their turn to continue to wait. Thus, investors may be looking at a much more favorable backdrop over the coming year.
Of course, the question is just how much of this enthusiasm is already baked into Archer’s current valuation. On that front, we’ll have to see.
But with Archer Aviation now becoming more than just a commercial eVTOL player, but also a potential key defense contractor, this is a stock I think has numerous catalysts that shouldn’t be ignored. I wouldn’t be surprised to see Archer garner a much higher valuation by year end, and this is a stock that remains on my top ideas list right now.
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