Shares of Archer Aviation Inc. (ACHR) are soaring 5.01% in pre-market trading on Monday, as investors appear to be reassessing the electric vertical takeoff and landing (eVTOL) aircraft maker's recent strategic decisions and long-term potential. This upward movement comes as a relief to shareholders following a challenging week that saw the stock plummet 27%.

The rally seems to be driven by several factors. First, Archer's recent acquisition of Hawthorne Airport in Los Angeles, announced alongside their earnings report, is being viewed as a strategic move to establish a hub for their planned L.A. Air Taxi network. Raymond James analyst Savanthi Syth noted that unlike similar acquisitions in the industry, Hawthorne is already profitable, potentially adding value to Archer's operations.

Additionally, while Archer's recent $650 million equity raise initially concerned some investors due to potential dilution, analysts now appear to be viewing it more favorably. The additional funds significantly boost Archer's liquidity, providing the company with over $2 billion to fund its operations as it works towards commercial service in 2026. This cash position is crucial, as the company is currently burning through approximately $500 million annually and isn't expected to achieve positive cash flow until 2029. Despite lowering their price targets slightly, analysts remain overwhelmingly bullish on Archer, with 86% rating the stock a Buy, well above the average for S&P 500 companies. As the market digests these developments, investors seem to be regaining confidence in Archer's long-term prospects in the emerging air taxi market.