Key Takeaways

• Shares of Archer Aviation and Joby Aviation jumped Monday, extending gains from Friday.

• President Donald Trump signed an executive order creating a pilot program meant to accelerate the development of electric vertical takeoff and landing technology.

• The policy is meant is to combat "unfair foreign competition [that] has posed a national security risk," the White House said.

President Donald Trump signed an executive order Friday aimed at “Unleashing American Drone Dominance,” and shares of unmanned aircraft manufactures are flying higher Monday.

Archer Aviation (ACHR) popped 8% in early trading Monday, while Joby Aviation (JOBY) jumped 10%, both extending gains from Friday. Space launch services firm Rocket Lab (RKLB) is up 11%.

The executive order establishes a pilot program to hasten the adoption of electric vertical takeoff and landing (eVTOL) technology, which companies such as Joby and Archer are utilizing for commercial air taxis and military aircraft, respectively. The policy is meant is to combat "unfair foreign competition [that] has posed a national security risk," according to a White House fact sheet.

The order also allows for increased testing of “beyond visual line of sight” drone operations, meaning unmanned aircraft could be flown beyond a range where supervisors can directly see them.

The development of air taxi technology has given rise to a new term: the low-altitude economy. Last week, Morgan Stanley estimated that the LAE could eventually “vastly exceed the size of today's automotive market” and named Tesla (TSLA) as a potential company to watch in the sector. Tesla hasn’t announced any intention to develop eVTOLs, but CEO Elon Musk has discussed the need for a homegrown low-altitude economy in the U.S.

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