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Palantir in March announced an artificial intelligence (AI) partnership with Archer Aviation.
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Archer does not generate revenue, but there are major growth plans in the air taxi industry.
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The company hopes to scale its operations significantly by the end of the decade.
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10 shares we like better than Archer Aviation ›
Palantir Technologies (Nasdaq: Pltr) In recent years, it has been one of the best artificial intelligence actions (AI). And when you partner with business, it can be a great sign for a newly emerged company.
In March Palantir announced a deal to work with Aviation Sagittarius (Nyse: Achr)Which could help him scale his production capabilities and position it for long -term forward growth. With Palantir working with Archer, can the aviation company become the next large growth stock in which to invest?
Archer deals with the development of electric vertical take -off and landing planes that can transport people and possibly resolve a traffic headache in major cities such as New York and Los Angeles. It is in the early stages of the production of its midnight aircraft and by the end of this year its purpose is to be able to produce at least two per month.
Using Palantir’s AI tools to improve its processes can help the company achieve its goals. By 2030, Archer hopes to make 650 aircraft a year.
The company has been declared an official air taxi supplier at the Los Angeles Olympics in 2028. A strong show that it can legalize Archer’s business model to a much broader spectrum than users and investors. The key will be the production of sufficient Evtols (midnight can only transport four passengers) by then and prepare them for the games.
But even before that, this summer, the company expects to deliver midnight aircraft (piloted) to the United Arab Emirates. To achieve this would be another good sign of progress for investors.
A clear risk of Archer’s shares at this early stage is that he does not yet generate revenue and his losses are accumulating. During the first three months of the year, the company caused an operational loss of $ 144 million to $ 142.2 million over the previous year. The danger is that as the company scores operations and starts producing airplanes at a rapid rate, its costs can increase rapidly.
The good news is that the company is well funded with more than $ 1 billion in cash on its books; He used $ 94.6 million during his daily operating activities during the first three months of the year. So far, there seems to be enough track for the business to grow, but it will be curious to see how its operating costs and burning money look when production really increases and what margins are on its aircraft.