Cathie Wood's Ark Invest reduced its stake in Archer Aviation on Thursday, signaling concern about the electric vertical takeoff and landing (eVTOL) aircraft maker even as it prepares to launch commercial air taxi service later this year. The move is notable because Archer's stock has lost more than half its value over the past year, yet Wall Street analysts still project dramatic revenue growth in the coming years.

Why Is Archer Aviation Stock Struggling Despite Strong Growth Forecasts?

Archer Aviation is developing the Midnight aircraft, a next-generation flying machine designed for short-haul flights in tight urban spaces. The company is currently working through the rigorous Federal Aviation Administration (FAA) certification process, which explains why it's generating negligible revenue and posting substantial losses at this stage.

Despite the current financial challenges, Wall Street analysts remain bullish on the company's long-term prospects. Their revenue projections paint a picture of explosive growth once commercial operations begin:

• 2026 Revenue: $9 million as the company ramps up operations
• 2027 Revenue: $94 million as service expands
• 2028 Revenue: $482 million, coinciding with the Los Angeles Olympic Games
• 2029 Revenue: $1.43 billion as the market matures

These forecasts have been pared back in recent months as market sentiment has cooled on the eVTOL sector overall. Still, analysts believe the stock would need to double from current levels to reach their average price target, suggesting they see significant upside potential.

What's Archer's Path to Profitability and Market Launch?

Archer has positioned itself strategically to capitalize on the emerging urban air mobility market. The company struck a deal to be the official air taxi provider for the 2028 Olympic Games in Los Angeles and even purchased a small regional airport in the area to ensure smooth operations during the games.

The company maintains a strong financial position despite its stock troubles. Archer's market capitalization of $4 billion translates to an enterprise value of just $2.4 billion when accounting for its net cash position, giving it substantial runway to complete development and certification without needing additional capital raises.

How to Evaluate eVTOL Investments During Market Uncertainty

For investors considering positions in emerging aviation technology companies, several factors warrant careful consideration:

• Regulatory Timeline: Monitor FAA certification progress closely, as delays in approval could push revenue timelines back significantly and impact near-term financial projections
• Cash Position: Examine whether companies have sufficient capital to reach profitability without dilutive financing, which can erode shareholder value
• Market Contracts: Look for concrete commercial agreements like Archer's Olympic Games deal, which provide revenue visibility and reduce execution risk
• Analyst Consensus: Track how Wall Street's revenue forecasts evolve over time, as significant downward revisions may signal fundamental business challenges

Wood's decision to sell Archer shares despite the company's strong balance sheet and growth prospects suggests she may be concerned about near-term stock performance or seeking liquidity for other investment opportunities. The Ark Invest founder was raising cash across more than 20 stocks on Thursday, likely to participate in upcoming initial public offerings (IPOs) expected to hit the market in coming weeks.

The timing of Wood's exit is particularly interesting given that Archer is hopeful it will launch its premium air taxi service later this year. If the company successfully begins commercial operations and moves toward profitability on schedule, the stock could recover significantly from its current depressed levels. Conversely, any delays in FAA certification or service launch could validate Wood's decision to reduce exposure to the company.