Shares of electric vertical takeoff and landing (eVTOL) manufacturers Joby Aviation (JOBY, Financial) and Archer Aviation (ACHR, Financial) rose in the stock market after investment bank Needham assigned both firms a “buy” rating. Joby increased 12.7% to $6.33 per share, while Archer surged over 16% to $5.13. Notably, even though Joby experienced a slight decline in premarket trading on November 20, Archer managed to maintain its upward momentum.
Joby and Archer are pioneering the urban air mobility (UAM) sector, developing aircraft capable of vertical takeoff and landing, representing a potential future for short-range transportation. Both companies are targeting Federal Aviation Administration (FAA) certification by 2026, aiming for commercial operations by 2028. Industry projections estimate the UAM market could exceed $1 trillion by 2040, highlighting the immense growth potential of this sector.
While stock appreciation reflects investor optimism, significant challenges remain. Both Joby and Archer face high cash burn rates, with each expected to require an additional $2 billion in funding to sustain operations over the next year. Currently, Joby has a market capitalization of $4.3 billion, while Archer stands at $1.88 billion. While these figures indicate strong potential for future growth, investors must be prepared for a long-term commitment, as meaningful returns could take years to materialize.
