Archer Aviation (ACHR) Stock Falls 15% as Cathie Wood Swoops In With $40M Buy

TLDR

Table of Contents

Archer Aviation stock dropped 15% on Friday after announcing an $850 million share sale at $10 per share
The company plans to use funds for AI-based aviation software, infrastructure, and its 2028 Olympics partnership
Cathie Wood’s ARK Invest bought $40 million worth of Archer shares during the dip, purchasing 3.4 million shares
Trump’s recent executive order created an eVTOL pilot program, benefiting companies like Archer and Joby Aviation
Analysts maintain a Moderate Buy rating with average price target of $11.75, implying 17.6% upside

Archer Aviation took a beating on Friday. The stock dropped nearly 15% after the company announced it sold $850 million worth of shares at $10 each.

The electric air taxi maker isn’t exactly hurting for cash now. The funding round gives Archer a pro forma liquidity position of about $2 billion.

CEO Adam Goldstein tried to put a positive spin on things. He said the company now has “the strongest balance sheet in the sector” and called Archer’s future bright.

The money will go toward some pretty interesting projects. Archer plans to roll out an AI-based aviation software platform. They’re also building infrastructure for their Launch Edition program.

The 2028 Olympics partnership is a big part of their plans. Archer will serve as the official air taxi provider for the LA games and Team USA.

Archer x @LA28 x @TeamUSA
We’re extremely proud to announce that Archer is the exclusive Air Taxi provider of the LA28 Olympic and Paralympic Games and Team USA. With over 15 million visitors expected to be hosted during the Games and billions of viewers expected to tune in… pic.twitter.com/FVo28U8paa
— Archer (@ArcherAviation) May 15, 2025

This share sale comes at an interesting time. President Trump recently signed an executive order creating a pilot program for electric vertical takeoff and landing vehicles.

Trump’s eVTOL Push Lifts Sector

Both Archer and competitor Joby Aviation rallied earlier this week on the Trump news. The executive order supports developing and deploying more eVTOLs in the United States.

The timing of Archer’s fundraising makes sense. Companies often strike while the iron is hot in terms of investor interest.

eVTOL demand has grown as developers pitch the technology’s benefits. They say it can reduce emissions and cut traffic congestion.

But the tech faces real hurdles. Regulatory approval and safety concerns remain major challenges for the industry.

Cathie Wood Sees Opportunity

While other investors were selling, Cathie Wood was buying. Her ARK Invest funds purchased $40.28 million worth of Archer shares during Friday’s dip.

Wood bought 3.43 million shares through three different funds. The ARK Innovation ETF grabbed the biggest chunk with 2.83 million shares.

The ARK Autonomous Technology & Robotics ETF added 463,149 shares. The ARK Space Exploration & Innovation ETF picked up another 140,636 shares.

Wood has been known for buying dips in stocks she believes in. This move shows her continued confidence in the eVTOL space.

Archer already has some solid partnerships in place. The company works with United Airlines on airport air taxi services.

Competitor Joby recently got $250 million from Toyota as part of a larger $500 million deal. This shows traditional automakers are taking eVTOLs seriously.

Archer plans to show off its Midnight aircraft at the Paris Air Show this month. The United Arab Emirates will be their first launch market.

Analysts remain cautiously optimistic about the stock. Four analysts rate it a Buy while two say Hold for a Moderate Buy consensus.

The average price target sits at $11.75, which implies 17.6% upside from current levels. The stock has already gained over 215% in the past year.

Archer sold 85 million shares in the offering, which explains the immediate dilution concerns from shareholders.

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