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Archer Aviation's Military Pivot: Is It to Find a Safer Flight Path?
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Key Takeaways
Archer Aviation is pivoting from urban air mobility toward defense contracts with its Midnight eVTOL.
ACHR partnered with Anduril and raised over $700M to fund hybrid VTOL development for defense.
Acquisitions from Overair and Mission Critical Composites boost ACHR's prototyping and fabrication.
Archer Aviation Inc. ((ACHR - Free Report) ) started its journey in 2018 with the mission to make urban air travel safe, quiet, and affordable by developing electric vertical takeoff and landing (eVTOL) aircraft. While ACHR’s primary focus still remains on urban air mobility, particularly with the successful marketing of its Midnight eVTOL aircraft, it has strategically pivoted toward defense contracts.
This shift must have been driven by ACHR’s efforts to diversify its revenue streams beyond the developing urban air mobility market, which is still largely in its nascent stage. Notably, growing global demand for advanced autonomous military systems and significant U.S. defense budget allocations, amid growing geopolitical hostilities worldwide, position ACHR to capitalize on a more stable and well-funded sector.
This move, first initiated with the company’s partnership announcement in December 2024 with defense giant Anduril Industries, focused on the joint development of a hybrid VTOL aircraft for critical defense applications. To support this initiative, ACHR raised $430 million in additional equity capital. In February 2025, the company raised another $301.8 million of equity capital to accelerate the development of its hybrid aircraft platform for the defense market.
Its defense initiatives gained substantial momentum in August 2025 with two key acquisitions. These included the purchase of a patent portfolio and critical talent from Overair, a spin-off of Karem Aircraft known for high-efficiency tiltrotor technology, and specialized composite manufacturing assets — including an approximately 60,000-square-foot facility — from Mission Critical Composites. The acquisitions should enhance Archer's rapid prototyping capabilities and bring advanced composite fabrication in-house, directly supporting its defense aircraft development.
These moves were built upon the favorable U.S. defense budget environment, with the Pentagon’s fiscal 2026 budget request of $13.4 billion for autonomous military systems, providing eVTOL stocks like ACHR with a potential lucrative revenue generation opportunity.
Other eVTOL Stocks Warranting a Look
Apart from Archer's recent pivot, other eVTOL-focused stocks are also aggressively expanding into the defense side of the autonomous aerospace industry, leveraging a dual-use strategy, similar to those discussed below.
Joby Aviation ((JOBY - Free Report) ): It is another prominent player in the eVTOL space, which is developing its ability to offer an autonomous solution in defense. Recently, JOBY showcased its autonomous defense capabilities by completing a military exercise. As part of the Resolute Force Pacific, a department-level exercise led by Pacific Air Forces, Joby conducted a demonstration and validation of its Superpilot autonomous flight technology over the Pacific Ocean and Hawaii.
Vertical Aerospace ((EVTL - Free Report) ): The company is yet another eVTOL manufacturer aimed at capturing the defense section of the autonomous aerospace market. In May 2025, EVTL announced that it is developing a hybrid-eVTOL variant of its VX4 aircraft, which would cater to sectors like defense and logistics, in addition to commercial. The low noise and heat signatures make this hybrid variant well-suited for sensitive missions.
The Zacks Rundown for ACHR
Shares of ACHR have gained 162% in the past year compared with the industry’s 13.2% growth.
Image Source: Zacks Investment Research
The company’s shares are trading at a discount on a relative basis, with its trailing 12-month Price/Book being 3.24X compared with its industry’s average of 6.29X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ACHR’s 2025 loss has improved over the past 60 days, while the same for 2026 has made no movement.
Image Source: Zacks Investment Research
ACHR stock currently carries a Zacks Rank #4 (Sell).
Image: Bigstock
Archer Aviation's Military Pivot: Is It to Find a Safer Flight Path?
Key Takeaways
Archer Aviation Inc. ((ACHR - Free Report) ) started its journey in 2018 with the mission to make urban air travel safe, quiet, and affordable by developing electric vertical takeoff and landing (eVTOL) aircraft. While ACHR’s primary focus still remains on urban air mobility, particularly with the successful marketing of its Midnight eVTOL aircraft, it has strategically pivoted toward defense contracts.
This shift must have been driven by ACHR’s efforts to diversify its revenue streams beyond the developing urban air mobility market, which is still largely in its nascent stage. Notably, growing global demand for advanced autonomous military systems and significant U.S. defense budget allocations, amid growing geopolitical hostilities worldwide, position ACHR to capitalize on a more stable and well-funded sector.
This move, first initiated with the company’s partnership announcement in December 2024 with defense giant Anduril Industries, focused on the joint development of a hybrid VTOL aircraft for critical defense applications. To support this initiative, ACHR raised $430 million in additional equity capital. In February 2025, the company raised another $301.8 million of equity capital to accelerate the development of its hybrid aircraft platform for the defense market.
Its defense initiatives gained substantial momentum in August 2025 with two key acquisitions. These included the purchase of a patent portfolio and critical talent from Overair, a spin-off of Karem Aircraft known for high-efficiency tiltrotor technology, and specialized composite manufacturing assets — including an approximately 60,000-square-foot facility — from Mission Critical Composites. The acquisitions should enhance Archer's rapid prototyping capabilities and bring advanced composite fabrication in-house, directly supporting its defense aircraft development.
These moves were built upon the favorable U.S. defense budget environment, with the Pentagon’s fiscal 2026 budget request of $13.4 billion for autonomous military systems, providing eVTOL stocks like ACHR with a potential lucrative revenue generation opportunity.
Other eVTOL Stocks Warranting a Look
Apart from Archer's recent pivot, other eVTOL-focused stocks are also aggressively expanding into the defense side of the autonomous aerospace industry, leveraging a dual-use strategy, similar to those discussed below.
Joby Aviation ((JOBY - Free Report) ): It is another prominent player in the eVTOL space, which is developing its ability to offer an autonomous solution in defense. Recently, JOBY showcased its autonomous defense capabilities by completing a military exercise. As part of the Resolute Force Pacific, a department-level exercise led by Pacific Air Forces, Joby conducted a demonstration and validation of its Superpilot autonomous flight technology over the Pacific Ocean and Hawaii.
Vertical Aerospace ((EVTL - Free Report) ): The company is yet another eVTOL manufacturer aimed at capturing the defense section of the autonomous aerospace market. In May 2025, EVTL announced that it is developing a hybrid-eVTOL variant of its VX4 aircraft, which would cater to sectors like defense and logistics, in addition to commercial. The low noise and heat signatures make this hybrid variant well-suited for sensitive missions.
The Zacks Rundown for ACHR
Shares of ACHR have gained 162% in the past year compared with the industry’s 13.2% growth.
Image Source: Zacks Investment Research
The company’s shares are trading at a discount on a relative basis, with its trailing 12-month Price/Book being 3.24X compared with its industry’s average of 6.29X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ACHR’s 2025 loss has improved over the past 60 days, while the same for 2026 has made no movement.
Image Source: Zacks Investment Research
ACHR stock currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.