Why Archer Aviation Stock Dropped This Week

Archer Aviation (ACHR 0.25%) The flying electric vehicle (EV) company’s stock price has fallen 14.3% since Friday’s market close, according to data from S&P Global Market Intelligence.

Meanwhile, the S&P 500 The index fell 2.1%, and the more growth-weighted index Nasdaq Composite Index The index was down about 3.4% over the period. Uneven earnings season performance and fresh economic data hit many growth stocks hard this week, and Archer was one of the biggest participants in the decline. But there was actually some good news for the company.

Archer Aviation investors have had a lot to think about this week

Archer stock has lost altitude this week due to a variety of bearish catalysts. High-profile earnings reports from companies such as Amazon, MicrosoftAnd Intel The results did not thrill Wall Street and had repercussions for the broader market. Investors are also evaluating some recent warning signs about the U.S. economy.

The Federal Reserve’s meeting on Wednesday signaled that the long-awaited rate cut would begin in September, but new concerns quickly emerged. On Thursday, data showed an unexpected increase in jobless claims, and the U.S. Labor Department released additional data the next day showing that July’s job growth slowed significantly.

Investors are concerned that the risk of recession is increasing, and Archer’s stock price has fallen accordingly. Since the company’s valuation is still in the pre-revenue phase, it is highly speculative. In addition to making investors more cautious, a recession could significantly slow the speed at which Archer is able to find partners and customers in the public and private sectors.

But there was good news

Although Archer shares suffered a double-digit decline this week, that decline was likely mitigated by some good news for the flying electric vehicle specialist. On Wednesday, the company showed off its Midnight vehicle in Atlanta and also confirmed that construction of its Covington, Georgia, manufacturing facility is on track to be completed this year.

Archer says the nearly 400,000-square-foot plant will allow it to produce 650 Midnight aircraft per year. While the company’s outlook remains highly speculative, it’s encouraging to see that vehicle production is poised to make major strides in the near future.