Why Is Archer Aviation Stock Rising Over 4% Premarket Today?

• The firm will supply its powertrains for Omen, a hover-to-cruise autonomous air vehicle.
• The UAE has committed to an initial acquisition of 50 Omen systems.
• Archer is manufacturing its electric powertrain across its facilities in the U.S. for both manufacturing and testing purposes.

Archer Aviation (ACHR) stock gained over 4% in premarket trading on Tuesday after the air taxi maker said it will supply its dual-use electric powertrain technology for the Omen autonomous aerial vehicle system being developed by  Anduril Industries and Edge Group.

The firm said that the deal marks the first time Archer will make its proprietary, advanced powertrain technology, in use on its Midnight aircraft, available to a third party, introducing a new revenue stream.

Defense Pivot Could Help Ease Investor Concerns

Omen, a hover-to-cruise autonomous air vehicle, is being co-developed and co-produced by Anduril and EDGE Group in the UAE. The UAE has committed to an initial acquisition of 50 Omen systems.

“While most see our Midnight eVTOL as an aircraft, we view Midnight as a platform that plays host to a wide range of new and exciting aerospace technologies that will be leveraged way beyond our own aircraft. Our powertrain deal with Anduril is the first of what we expect to be many examples of this,” said Adam Goldstein, CEO of Archer.

Archer manufactures its electric powertrain across its U.S.-based production and test facilities. Like its peer, Joby Aviation, Archer is competing in the nascent eVTOL industry, with many large cities worldwide considering the aircraft as an alternative to road travel to reduce traffic congestion and pollution.

However, delays in obtaining regulatory approvals have pushed back the launch of its Midnight aircraft, raising liquidity concerns, as it has yet to generate any revenue. The company still holds a strong backlog of orders.

What Are Stocktwits Users Thinking?

Retail sentiment on Stocktwits about Archer was in the ‘bullish’ territory at the time of writing.

One user expected the stock to jump up to $10 on the partnership.

Earlier this month, the company announced that it had acquired Hawthorne Airport in Los Angeles for $126 million in cash, to serve as its operational hub for its planned L.A. air taxi network, including a key role in the LA28 Olympic & Paralympic Games.

The company announced in September that it was participating in a federal pilot program to accelerate the deployment of air taxis and was partnering with United Airlines, among others, to conduct trials.

Archer stock has fallen 25% this year.

Also See: Boeing Stock In Spotlight After It Lands Fresh 787 Order From Gulf Air Amid Middle East Buying Spree

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