Joby broadens Middle East footprint with Saudi testing plans, adding demand optionality but not resolving core execution risks

What happened

Joby Aviation, still pre-revenue but well-capitalized with roughly $1B in cash and investments as of mid-2025, is pushing ahead on its vertically integrated OEM-operator model while navigating accelerating cash burn and the loss of some near-term U.S. defense revenue ballast. The latest update adds a Saudi Arabia angle: per Zacks, Joby plans new testing activities in the Kingdom and has struck regional air taxi agreements, extending its Middle East presence beyond the planned early-2026 Dubai launch. Strategically, this builds on a playbook that prioritizes markets with supportive regulators and infrastructure partners, complementing Dubai’s framework and the pending acquisition of Blade’s passenger operations, which together are intended to seed early demand and operational know-how. However, the fundamental constraints remain unchanged: FAA and other regulatory certifications, vertiport build-out, manufacturing ramp at Marina/Dayton, and the need to translate early routes into credible unit economics before the balance sheet is materially drawn down. Against a roughly $13.8B pre-revenue valuation, the Saudi news is directionally positive for long-term growth optionality but does not yet shift the near-term risk/reward away from a wait-and-see posture.

Implication

For investors, the Saudi expansion is a constructive signal that Joby can replicate its Dubai-first strategy in another Middle Eastern market, potentially building a multi-city regional franchise if regulatory and infrastructure partners deliver. This incremental demand visibility slightly de-risks the long-term revenue story by adding another potential early adopter beyond Dubai and the Blade network, but it does little to change the immediate reality of heavy losses and an unproven commercial model. The company’s value still hinges on clearing FAA and international certification hurdles, proving reliable operations, and demonstrating sustainable unit economics on its first routes; until those milestones are clearer, the stock’s ~$13.8B pre-revenue valuation embeds substantial execution expectations. Existing holders should view the Saudi development as a reason to keep monitoring rather than trimming solely on DOD program noise, while staying focused on certification progress, Dubai readiness, Blade integration, and quarterly cash burn. Prospective investors may prefer to wait for either a more attractive entry point or tangible evidence of certified operations and early route economics before underwriting a more aggressive growth thesis, using Saudi progress as a secondary—but not primary—indicator of traction.

Thesis delta

The Saudi testing plans and regional air taxi agreements are incrementally bullish for Joby’s long-term growth optionality and geographic diversification, showing that regulators and partners beyond the UAE are engaging with its platform. However, this does not materially change the core thesis from the latest DeepValue report: the stock still prices in significant success ahead of proof on certification, infrastructure, and unit economics, and near-term financial risk is still dominated by rising cash burn rather than lack of potential markets. As a result, the stance remains effectively HOLD/NEUTRAL, with a slightly stronger bias to monitor international execution but no upgrade to a more constructive rating yet.