Archer Aviation (NYSE: ACHR) stock has been on an incredibly hot streak lately. Thanks to a combination of bullish coverage from analysts, news about its commercial flight plans, and eye-catching news that the company is entering the defense industry, Archer Aviation stock is now up 291% over the last three months.
But while the company's market capitalization has risen to nearly $5 billion, the company still isn't posting any revenue. With that kind of valuation and speculative outlook, it's not unreasonable to wonder whether Archer's stock has already flown too high for investors to score big wins.
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On the other hand, I think there's a very good chance that the company's share price can continue flying higher and delivering wins for long-term investors who buy shares at today's prices.
Archer Aviation is just beginning to take off
As exciting as the company's opportunities in the private sector are, its recent foray into the defense industry could have even more potential. On Dec. 12, Archer announced that it had formed a partnership with Anduril to create flying electric vehicles (EVs) for the defense industry. Anduril is a defense company focused on innovative technologies that's already won U.S. defense contracts. Then on Dec. 22, The Financial Times published a report suggesting that Anduril and Palantir were teaming up to create a consortium of next-generation tech companies capable of disrupting the defense industry.
Archer Aviation's commercial operations appear to be on the verge of being cleared for takeoff, and it's at the very outset of potentially massive opportunities in the defense space. So even though the company has managed to post explosive valuation gains despite still being in a pre-revenue state, there are good reasons to think the stock still has a huge runway for long-term growth.
The market for flying defense-industry EVs is still in its infancy, and Archer's forefront positioning opens the doors for potentially massive stock gains.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
