While everyone was watching her buy $10 million worth of beaten-down AMD shares, Cathie Wood (aka Mama Cathie) was quietly loading up on something way more exciting and, let’s be real, a lot riskier, which is just her flavor. I’m talking about electric air taxis. Yes, you read that right. This is not a joke. The woman known for her yolo moves on Tesla and bitcoin is now hitching a ride with Archer Aviation, a company that’s taking their drone obsession past even New Jersey’s level.

Archer Aviation (a vertical takeoff and landing (VTOL) company, yes there’s an acronym for it) is all in on a future where we fly over gridlocked highways in electric air taxis. Cathie, CEO of ARK Invest, apparently loves the idea so much that she backed the truck up and loaded up five million shares of Archer… most of them under $10 each. If you do the math, that’s around $50 million she put in the fire to burn.

While it’s really hard to sell you on an electric air taxi company, let me at least try. Archer’s been busy lining up some impressive partners. In December, right before the new year, they announced a partnership with defense-tech company Anduril and raised $340 million from big players like United Airlines and Stellantis. And yes, those are the same United Airlines and Stellantis you’re thinking of.

Before you rush to hit “buy” on Archer’s stock and join “Mama Cathie” on this money losing spree, there’s a few problems. First, Archer announced a reverse stock split, which sent their share price spiraling from $11 to $9.75. If you don’t already know, reverse splits are often viewed as a company’s way of inflating its stock price to avoid getting delisted… not exactly a sign of stability.

Still, Cathie’s no rookie when it comes to going all in “red”. She grabbed 2.5 million shares at rock-bottom prices between $3.20 and $4.20 last fall. Even with the dip, her average cost basis makes this a winning trade… at least for now. And let’s not forget Archer’s 154% stock surge over the last six months, which pushed its market cap up 246% to an impressive $4 billion. Let me just say, that’s not bad for a company still in its pre-revenue phase.

Here’s where it gets way more interesting… and way more speculative. Archer’s Midnight aircraft, a futuristic mashup of a helicopter and a plane, has taken test flights and is gearing up for commercial operations within the next year. The goal is pretty hard to get behind: to make air taxis as common as Uber rides. But scaling up without burning through all their cash reserves is gonna be near impossible. The company has lofty ambitions, including plans to operate at the 2028 Olympics in Los Angeles. But as cool as air taxis sound, they’re still a long way from being the next big thing. Building vertiports, securing FAA certifications, and convincing the masses to get rid of their cars for flying pods is no small feat. Add to that the fact that Archer’s competition, like Joby Aviation, is also battling for market share, and there’s a reason “Mama Cathie” is interested in the company. It’s a big gamble.

So, why is Cathie Wood so obsessed with Archer? Simple: the potential upside is enormous. If Archer can secure defense contracts through its Anduril partnership or carve out a slice of the urban air mobility market, its stock could soar… literally and figuratively. But this is high-risk, high-reward territory, and not every bet pans out. Just ask investors who’ve backed other eVTOL startups that ended up grounded. Consider Lilium. While it was once hailed as a leader in the electric air taxi sector, the German startup’s stock engine stalled in mid air and fell from $125 to $15 thanks to their prototypes facing delay after delay… and their investors realizing “yeah this might not ever happen.” Then there’s EHang, the Chinese drone and air taxi company that managed to crash even harder… figuratively, of course. Their stock soared to $124 before freefalling to $15, thanks to a short-seller report that basically called their entire operation a sham.

For now, Archer Aviation’s story remains one to watch. If Cathie’s vision pans out, we could see air taxis zipping over traffic in the near future. But unlike her, I’m not betting on it.

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Stock.News has positions in United Airlines and Tesla.