Should Investors Buy This $11 Stock Before Henry Ford's Prophecy Comes True at Last?

"Mark my words," Henry Ford told Forbes in 1940, "a combination airplane and motorcar is coming." Perhaps anticipating mockery, he added, "You may smile, but it will come."

Today, most people probably still consider the idea of flying cars to be improbable when they're being polite and laughable if they're being honest. Yet Morgan Stanley seconded Ford's prediction in 2019, forecasting that urban aircraft could be a $1.5 trillion industry by 2040.

We take it as a fact of life, but the average American loses 43 hours a week, or more than a full work week, stuck in traffic each year. Anyone who has ever lost hours in traffic jams can understand the appeal of electric vertical takeoff and landing (eVTOL) aircraft, or small, sleek, autonomous airborne vehicles that would allow users to opt out of congestion around major cities. With ranges of up to 150 miles, eVTOLS could transform a three-hour drive from Baltimore to Philadelphia into a 25-minute flight you can spend reading, eating, or sleeping as they fly you to your destination.

Image source: Getty Images.

Today, six years after Morgan Stanley's forecast of a $1.5 trillion flying car sector, a lot has happened in the industry. And while no passengers have flown commercially in eVTOLs yet, the industry isn't as futuristic as many think. The year 2026 could be the year that the Federal Aviation Administration (FAA) grants approval to the first eVTOL company to begin commercial flights, and that could be an X factor for one eVTOL stock that trades around $11 per share today.

Why Archer Aviation is up 265% in 12 months

Based in San Jose, California, Archer Aviation (NYSE: ACHR) is an eVTOL company with 774 full-time employees. Valued at $7.2 billion, it's still in its pre-revenue phase. It's led by a charismatic CEO, Adam Goldstein, who has scored some victories in recent months.

Last week, Archer inked a deal with Korean Air to help it introduce eVTOLs to South Korea. Terms of the agreement include Korean Air planning to buy up to 100 of Archer's Midnight aircraft, though an official purchase hasn't been made yet.

Before that, though, the company expects to receive its first-ever commercial revenue in late 2025 thanks to an agreement inked with Abu Dhabi Aviation and Audio, which, in the words of Chief Technology Officer Tom Muniz, "sets us up for low tens of millions of dollars in payments over the next 18 to 24 months, with a portion of that starting this year." The deal, which links Archer with key aviation entities in Abu Dhabi, also positions Archer as the first in Abu Dhabi to build eVTOL manufacturing capabilities.

And on Oct. 15, Archer won a competitive bid to acquire the patent portfolio of Lilium GmbH, a German aerospace company that has spent $1.5 billion since 2015 to develop advanced air mobility technologies. Winning the bid means that Archer will now control some 300 patent assets in battery management, advanced aircraft design, flight controls, electric engines, and more. The cost was 18 million euros, or just over $20 million.

Archer shares also surged 11% in early June when President Donald Trump issued an executive order to create a federal eVTOL pilot program. The White House's sense of urgency for America to get a head start on this technology can only help eVTOL companies as they seek certification from the FAA, which would allow their aircraft to go into commercial use in the U.S. To this end, Archer now has data from over 2,000 flight tests and certification reports, which as of last quarter were being finalized to provide to the FAA.

In the words of Goldstein, this executive order is "a presidential imperative to begin air taxi deployments in the U.S. as early as next year." If the FAA is indeed prepared to clear the way for commercial use of eVTOLs as soon as 2026, Archer's management is clearly determined to meet the moment. In the company's last earnings report in August, Goldstein laid out plans to ramp up manufacturing to support certification programs. Six of Archer's Midnight aircraft were in various stages of production at the time, with three of those in final assembly.

Wall Street gorging itself on Archer Shares

If Archer can beat its eVTOL rivals to win FAA certification first, it would allow the company a valuable first-mover advantage in the nascent but fast-growing sector. This is especially the case because Archer is better financed than its rivals. In June, following Trump's executive order, the company raised $850 million, giving it an industry-leading liquidity of $2 billion. For context, its nearest rival, Joby Aviation, finished the most recent quarter with $991 million in liquidity.

Archer reported an adjusted net loss of $114 million in the second quarter and expects to burn through between $110 million and $130 million in this current quarter. That means that its liquidity, which totaled $1.7 billion at the time of its August report, gives the company a multiyear runway and could allow it to spare no expense as it pursues FAA certification.

Could Archer be on the cusp of a coup in the industry? Wall Street seems to think so. In the 90-day window ending June 30, BlackRock bought 11.3 million shares, while Vanguard added over 16 million to its position on Archer. Morgan Stanley put its money where its mouth is, buying another 2.5 million shares. All told, Wall Street firms bought over 130 million shares, while selling just 17.2 million.

It's possible that these firms are simply making an asymmetric bet, concluding that while the odds are against Archer succeeding, the potential upside is so explosive that it's worth establishing a position just in case. Any investor in a similar position, with risk capital to burn and a high tolerance for volatility, might consider joining them. But anyone buying shares of Archer today should be open-eyed about the risks in this turbulent sector.

William Dahl has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.