ACHR Stock Alert: Stellantis gives Archer a $55 million cash injection

Archer Aviation (NYSE:ACHR) is taking the skies in many ways. After a difficult year of volatility, the electric vertical take-off and landing (eVTOL) startup has made a major new investment. The automaker Stellantis (NYSE:STLA) has announced a new $55 million investment in Archer after the company recently achieved a flight testing milestone. The eVTOL manufacturer has already received this new funding package and ACHR stock has been steadily rising throughout the day following this news.

This is not the first influx of cash Acher has received from Stellanis, but it certainly puts the company in a great position for further growth as its industry continues to expand.

Is Archer finally on the verge of turning the corner? The struggling startup is still struggling to recover from a rough year that saw it trend mostly downward. But the company is showing investors that it’s on the right track to make up lost ground.

What is happening with ACHR shares?

After a strong surge at the market open this morning, ACHR stock has managed to continue its upward trend. At the time of writing, it is up 9% and will likely finish the day even higher. The stock appears to have successfully overcome the volatility it has been battling for weeks. This could easily be the catalyst that pushes it out of penny stock territory and safely above the $5 mark.

Stellantis has been supporting Archer since 2021, but has been a strategic partner since 2020. In 2023 alone, the company invested a total of $110 million in the startup, both through purchases of ACHR shares on the open market and investments under its strategic financing agreement. Now Archer is showing remarkable progress. In June 2024, one of its vehicles successfully completed a transition flight reaching 100 miles per hour. CEO Adam Goldstein made the following statement about the new investment:

“Stellantis’ commitment to Archer is unparalleled, from the foresight to provide the manufacturing expertise and capital needed to accelerate Archer’s business goals to the strategic vision and unwavering support of Stellantis CEO Carlos Tavares. Together, we are working to redefine urban transportation and open up new possibilities for citizens around the world by giving them more efficient access to people, places and events in the regions where they live.”

Now the two companies are in an excellent position to continue growing. The eVTOL market is expected to grow at a compound annual growth rate (CAGR) of 25% between 2024 and 2030. Experts like InvestorPlace Senior investment analyst Luke Lango has called 2024 the year flying car stock prices will take off, and Archer will help usher in that new era.

What’s next

Some investors have approached Archer Aviation with caution. The company’s startup status makes some people nervous. In addition, the eVTOL sector is still new and developing.

However, ACHR stock is making remarkable progress, constantly reminding investors why they shouldn’t disregard it. Last month, it received approval from the Federal Aviation Administration (FAA) to operate a commercial airline. July has already begun, and a major source of new financing has been confirmed.

More cash from Stellantis is just what Archer needs to continue its slow climb to profitability. ACHR stock may still seem like a contrarian play, but there’s no denying that its recent performance has been promising.

At the time of publication, Samuel O’Brient had no position (either directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s disclosure policies.

At the time of publication, the editor in charge did not hold any positions (either directly or indirectly) in the securities mentioned in this article.