Why Archer Aviation's (ACHR) Legal Troubles Verify Warren Buffett's Philosophy
Elevate Your Investing Strategy:
Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Famously attributed to Warren Buffett and often quoted by active traders, the saying goes: 'Be fearful when others are greedy, and greedy when others are fearful.' The adage seems to apply perfectly to what's happening with ACHR stock.
I believe this irrational fear has created an opportunity for long-term investors after a thorough evaluation of Archer's manufacturing capabilities, regulatory environment, and the long-term demand environment for urban air mobility. I remain Bullish on Archer Aviation stock, despite the short-term legal uncertainty.
Negative Headlines Are Mostly Noise
My bullish outlook on Archer remains unchanged despite two recent negative headlines that briefly weighed on market sentiment. While a shareholder lawsuit in Delaware has been cleared to proceed to the next stage, I believe this legal development poses minimal risk to the company's core operations in the medium to long term.
The lawsuit alleges that Archer misled investors with overly optimistic timelines and inaccurate claims about its technological advancements. However, over the past few years, Archer has consistently demonstrated the technological edge of its flagship eVTOL, Midnight—effectively countering much of the skepticism. I see this litigation as largely immaterial in the long run.
Concerns about Stellantis potentially severing ties with Archer also appear overstated. Although Stellantis recently abandoned its hydrogen vehicle program following a disappointing earnings report, this move reflects a reallocation of resources toward its core automotive business—not a shift in its commitment to Archer. The partnership with Archer is a key part of Stellantis's broader strategy to diversify into the high-growth advanced air mobility market. Walking away now would undermine years of investment and strategic positioning.
In short, I view both developments as short-term noise rather than indicators of any structural weakness in Archer's long-term trajectory.
Commercialization is No Longer Decades Away
My bullish outlook on Archer Aviation is grounded in the belief that the company is on a clear path toward securing full FAA certification, a critical milestone that would allow it to launch commercial operations. While Archer remains a pre-revenue company and continues to post significant cash outflows— $94.6 million in Q1 alone and an average of roughly $84 million per quarter over the last nine quarters—I believe the prospect of regulatory approval meaningfully reduces long-term business risk.
According to recent filings, Archer has entered the fourth and final stage of the FAA's certification process, having successfully completed the first three. If progress continues as planned, the company expects to obtain full certification by the end of this year. Importantly, there are strong indications that U.S. regulators are supportive of both eVTOLs and the broader urban air mobility sector.
The FAA's creation of a new aircraft category specifically for certifying Archer's Midnight model reflects a flexible, forward-thinking approach to regulation. Additionally, the agency's ongoing collaboration with eVTOL manufacturers to establish safety standards signals a clear commitment to enabling commercialization. These regulatory tailwinds reinforce my confidence in Archer's long-term potential, even in the face of short-term financial challenges.
Archer is Well-Positioned to Tap Into a Multi-Billion-Dollar Opportunity
My long-term optimism about Archer Aviation's profitability is rooted in the vast market opportunity the company is targeting. According to Mordor Intelligence, the eVTOL aircraft market is projected to reach $1.19 billion by the end of this year and grow at an impressive CAGR of around 30%, hitting $4.36 billion by 2030. Key growth drivers include a favorable regulatory landscape, advances in battery energy density, and the urgent need for alternative mobility solutions as global airports approach maximum capacity.
The broader urban air mobility market further highlights the scale of Archer's potential. Currently valued at $5 billion, this market is expected to expand at a 19% CAGR, reaching $70 billion by 2040. These long-term projections underscore the significant runway ahead for Archer as a first mover in the space.
I'm also encouraged by Archer's strong cash position, which totaled just over $1 billion at the end of Q1. Management has highlighted this as the largest cash reserve in the industry, providing the company with a meaningful buffer to navigate regulatory hurdles and sustain operations through the pre-commercialization phase. This financial strength positions Archer well to capitalize on market growth and execute its long-term vision.
What is the Future of ACHR?
On Wall Street, ACHR stock carries a Moderate Buy consensus rating based on four Buy, two Hold, and zero Sell ratings over the past three months. ACHR's average stock price target of $11.75 implies almost 5% upside potential over the next twelve months.
While current analyst estimates suggest limited near-term upside, I believe those projections are likely to shift meaningfully once Archer secures full FAA certification. At this stage, many analysts remain conservative due to the company's pre-revenue status.
However, considering Archer's steady progress through the FAA certification process, the strong long-term demand outlook for the urban air mobility sector, and Archer's clear leadership position within the industry, I view the company as a compelling investment in the future of global transportation.
Short-Term Noise, Long-Term Opportunity
Archer Aviation shares have come under pressure following two negative headlines last week. However, a closer look reveals that the perceived risks are unlikely to have a meaningful impact on the company's long-term outlook. With a strong first-mover advantage in the urban air mobility space, Archer is well-positioned to capitalize on this emerging market—and I remain confidently Bullish on the company's ability to turn that opportunity into tangible long-term profitability.
With market participants currently fearing ACHR's immediate future, now may be the time to adopt a bullish stance with a long-term view.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
39 minutes ago
- Yahoo
Berkshire Hathaway issues stern warning over Trump's tariffs as profits impacted — here's what investors need to know
Warren Buffett's Berkshire Hathaway just reported second-quarter operating earnings of $11.16 billion — a slight 4% dip compared to last year. The modest decline was driven by lower insurance underwriting profits, even as other divisions like railroads, energy, retail, and manufacturing posted solid gains. But what really stood out wasn't the numbers — it was the tone. In its official filing, the company warned that President Trump's newly imposed tariffs on goods from Mexico, Canada, and China pose a real threat to its businesses. 'It is reasonably possible there could be adverse consequences on most, if not all, of our operating businesses,' Berkshire wrote in its Q2 earnings report. Buffet put it more bluntly and called tariffs 'an act of war, to some degree,' in a recent interview with CBS's Norah O'Donnell. 'Over time, they are a tax on goods. I mean, the tooth fairy doesn't pay 'em! And then what? You always have to ask that question in economics. You always say, 'And then what?'' Don't miss Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Tariffs may feel invisible — but they hit you While tariffs are framed as penalties on foreign countries, they often raise prices for American businesses and consumers. If it costs more to import steel, electronics, or groceries, someone pays — and usually, it's you. Buffett has long warned about how trade restrictions can: Raise the cost of everyday goods Disrupt supply chains Trigger retaliatory tariffs that hurt American farmers and exporters The latest moves by the Trump administration — including a proposed $250 visa fee for some international travelers and limitations on tax deductions for gambling losses — are already affecting tourism, manufacturing, and agriculture. Buffett's companies touch all those sectors, so his concern isn't theoretical. Still sitting on a mountain of cash Despite the cautionary tone, Berkshire is still immensely profitable and liquid. The firm ended the quarter with $344 billion in cash, slightly down from its record $347 billion earlier this year. But instead of spending, Buffett is holding back: No share buybacks in Q2 11 straight quarters of net stock selling $4.5 billion in equities dumped in the first half of 2025 Buffett seems to be waiting for better deals, or maybe bracing for a correction. Read more: Nervous about the stock market in 2025? Find out how you can A few red flags in the portfolio Berkshire also recorded a $3.8 billion loss on its long-troubled Kraft Heinz investment, which is reportedly weighing a grocery spinoff to revive growth. Two Berkshire directors resigned from the Kraft Heinz board earlier this year, suggesting waning confidence. And despite shares falling more than 10% from a record high, Berkshire didn't repurchase any of its own stock — a sign the firm may be anticipating more room to fall. What it means for you You don't need to own Berkshire stock to pay attention to this report. Berkshire's cautious tone, especially around tariffs, should resonate with everyday Americans. Tariffs will lead to higher prices — whether it's appliances, electronics, or groceries, expect price hikes if trade tensions escalate. Buffett's warnings point to a ripple effect for everyday Americans: Higher prices on goods imported from key trade partners Potential job losses in manufacturing and agriculture due to retaliatory tariffs More market volatility as investors respond to global trade uncertainty Food inflation may also stick around. Kraft Heinz's struggles reflect challenges across the grocery industry: high input costs, changing consumer tastes, and pressure to spin off underperforming brands. Buffett and Berkshire Hathaway aren't alone with their concerns. Other CEOs and economists have voiced concern that new trade barriers could hamper economic recovery just as inflation is cooling and interest rates are stabilizing. Even with billions in profit and an army of businesses, Buffett's Berkshire Hathaway is waving a red flag about the state of the economy. And when the 'Oracle of Omaha' is cautious, it's smart to listen. Keep an eye on policy, not just profits. What to read next Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Here are 5 simple ways to grow rich with real estate if you don't want to play landlord. And you can even start with as little as $10 Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
Yahoo
an hour ago
- Yahoo
Berkshire Hathaway issues stern warning over Trump's tariffs as profits impacted — here's what investors need to know
Warren Buffett's Berkshire Hathaway just reported second-quarter operating earnings of $11.16 billion — a slight 4% dip compared to last year. The modest decline was driven by lower insurance underwriting profits, even as other divisions like railroads, energy, retail, and manufacturing posted solid gains. But what really stood out wasn't the numbers — it was the tone. In its official filing, the company warned that President Trump's newly imposed tariffs on goods from Mexico, Canada, and China pose a real threat to its businesses. 'It is reasonably possible there could be adverse consequences on most, if not all, of our operating businesses,' Berkshire wrote in its Q2 earnings report. Buffet put it more bluntly and called tariffs 'an act of war, to some degree,' in a recent interview with CBS's Norah O'Donnell. 'Over time, they are a tax on goods. I mean, the tooth fairy doesn't pay 'em! And then what? You always have to ask that question in economics. You always say, 'And then what?'' Don't miss Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Tariffs may feel invisible — but they hit you While tariffs are framed as penalties on foreign countries, they often raise prices for American businesses and consumers. If it costs more to import steel, electronics, or groceries, someone pays — and usually, it's you. Buffett has long warned about how trade restrictions can: Raise the cost of everyday goods Disrupt supply chains Trigger retaliatory tariffs that hurt American farmers and exporters The latest moves by the Trump administration — including a proposed $250 visa fee for some international travelers and limitations on tax deductions for gambling losses — are already affecting tourism, manufacturing, and agriculture. Buffett's companies touch all those sectors, so his concern isn't theoretical. Still sitting on a mountain of cash Despite the cautionary tone, Berkshire is still immensely profitable and liquid. The firm ended the quarter with $344 billion in cash, slightly down from its record $347 billion earlier this year. But instead of spending, Buffett is holding back: No share buybacks in Q2 11 straight quarters of net stock selling $4.5 billion in equities dumped in the first half of 2025 Buffett seems to be waiting for better deals, or maybe bracing for a correction. Read more: Nervous about the stock market in 2025? Find out how you can A few red flags in the portfolio Berkshire also recorded a $3.8 billion loss on its long-troubled Kraft Heinz investment, which is reportedly weighing a grocery spinoff to revive growth. Two Berkshire directors resigned from the Kraft Heinz board earlier this year, suggesting waning confidence. And despite shares falling more than 10% from a record high, Berkshire didn't repurchase any of its own stock — a sign the firm may be anticipating more room to fall. What it means for you You don't need to own Berkshire stock to pay attention to this report. Berkshire's cautious tone, especially around tariffs, should resonate with everyday Americans. Tariffs will lead to higher prices — whether it's appliances, electronics, or groceries, expect price hikes if trade tensions escalate. Buffett's warnings point to a ripple effect for everyday Americans: Higher prices on goods imported from key trade partners Potential job losses in manufacturing and agriculture due to retaliatory tariffs More market volatility as investors respond to global trade uncertainty Food inflation may also stick around. Kraft Heinz's struggles reflect challenges across the grocery industry: high input costs, changing consumer tastes, and pressure to spin off underperforming brands. Buffett and Berkshire Hathaway aren't alone with their concerns. Other CEOs and economists have voiced concern that new trade barriers could hamper economic recovery just as inflation is cooling and interest rates are stabilizing. Even with billions in profit and an army of businesses, Buffett's Berkshire Hathaway is waving a red flag about the state of the economy. And when the 'Oracle of Omaha' is cautious, it's smart to listen. Keep an eye on policy, not just profits. What to read next Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Here are 5 simple ways to grow rich with real estate if you don't want to play landlord. And you can even start with as little as $10 Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Yahoo
an hour ago
- Yahoo
Warren Buffett's stock still struggling since May peak
Warren Buffett's stock still struggling since May peak originally appeared on TheStreet. There's a reason why shares of Warren Buffett's Berkshire Hathaway () and () have fallen more than 12% since early May. Some of its businesses aren't performing as well as in prior years. 💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰 The company saw operating profit drop to $11.16 billion, a 3.8% decline from a year earlier, in part because of declines in underwriting earnings in its insurance operations, according to its second-quarter earnings report released Saturday. Plus, it wrote down the value of its investment in Kraft Heinz () , the food giant Berkshire helped put together. Kraft Heinz shares have lost two third of their value since 2017. The pre-tax write-down came to about $5 billion. It still owns 27.4% of the company. Until this spring, Berkshire controlled two of the 12 seats on the Kraft Heinz board. It has given up both seats. The write-down was a rare disappointment for Buffett and Berkshire Hathaway, although analysts believe it was long shares struggle since spring Berkshire's Class A shares closed Friday at $711,480, down $8,370 on the day. The Class B shares ended at $472.84, up 96 cents. Berkshire shares hit intraday peaks of $812,855 and $542.07, respectively, on May 2, the day before the company's annual meeting when Buffett said he would retire as CEO on Dec. 31. The closes for the stock classes translated into year-to-date-gains of 18.5%. The shares then fell through May, June and July. One reason for the declines was the uncertainty created by the announcement. Buffett was a known quantity for Wall Street. Greg Abel, who will succeed the Oracle of Omaha as CEO, is less known. Perhaps as important, the big technology rebound that started in April probably drew money away from less glamorous opportunities. Like Palantir () , Facebook parent Meta Platforms () , Microsoft () and, of course, Nvidia () . Here is how the Berkshire B shares have behaved compared with the S&P 500 over the six months. Despite the shares' fallback since May, Berkshire's A shares are up 4.5% in 2025, with the B shares up 4.3%. The S&P 500 is up 6.1% on the year and up 29% from its April low. (We should note Berkshire rose on Friday as some investors saw it as a safe haven.) And the company has real strength. Berkshire ended the second quarter with $344.1 billion in cash and equivalents, about 37% of total assets. The cash position includes nearly $250 billion in short-term Treasury who turns 95 on Aug. 30, took control of Berkshire in 1965. It was then a struggling textile company in 1965. He has been CEO since 1970. Abel, who is Berkshire's vice chairman of non-insurance operations, is also CEO of Berkshire Hathaway Energy, which operates four electric utilities and related subsidiaries. More Warren Buffett: Warren Buffett's Berkshire Hathaway predicts major housing market shift soon Warren Buffett has harsh words for stock market investors Warren Buffett makes worrisome car insurance prediction Former Warren Buffett exec makes bold real estate bet A low-visibility corporate giant Berkshire is a huge conglomerate with about 392,000 employees. Much of its profits come from its insurance businesses. It owns Geico, Allegany and no fewer than 16 other insurance companies. It also owns the Burlington Northern Santa Fe Railroad, a host of electric utilities, Fruit of the Loom, Dairy Queen, Duracell, boot-maker Justin Brands and the Pilot chain of truck stops. Most of its companies run semi-autonomously and have been reliably successful and made Buffett and Berkshire shareholders wealthy. The railroad business is based in the western United States and will face new competitive pressures when — and if — rival Union Pacific Corp. () merges with Norfolk Southern Corp. () . The two sides agreed this past week to merge in a deal valued at about $85 billion. Assuming it closes, the result would be the first coast-to-coast railroad operator in the United States. Many analysts believe BNSF will need to find a merger partner of its own to compete. There, however, just five big railroads. Berkshire still is still a large investor in a host of companies with a fair value of $268 billion. The largest holdings are: American Express () . Apple () . Bank of America () . Coca-Cola () . Chevron Corp. () .Warren Buffett's stock still struggling since May peak first appeared on TheStreet on Aug 3, 2025 This story was originally reported by TheStreet on Aug 3, 2025, where it first appeared. Sign in to access your portfolio
