Could You Ride Out A Joby Aviation Stock Crash?
This electric air taxi pioneer falls harder than the market in a shock. The real question is whether your portfolio can handle the turbulence.
Joby Aviation (JOBY) stock fell 2.3% in the latest session, capping a month where it has lost significant ground. For shareholders, or those tempted by the dip, this volatility is familiar. The company is developing electric air taxis for commercial passenger service, and the market is weighing its very real progress, including a ‘dream slate’ of opportunities in the White House-backed eIPP program and a strong balance sheet with approximately $2.5 billion in cash, against the long and capital-intensive road to full commercialization.
That recent drop, however, is minor compared to the drawdowns this stock has weathered during true market shocks. The key question for any holder is not about the day-to-day, but about the deep, sustained falls that have historically come with market-wide stress. How far does this stock fall when the entire market panics, and can you truly ride that out?
A 51% Plunge In The 2022 Inflation Shock
When broad market shocks hit, Joby Aviation stock has historically fallen much harder than the averages. Across the five major shocks it has traded through, its peak-to-trough drawdown was an average of 27%, more than double the 13% average for the S&P 500 over the same periods. Its single deepest drawdown was 51%, a painful cut that occurred during the 2022 Inflation Shock & a period of monetary tightening.
The stock has been particularly vulnerable during periods of rapidly rising interest rates and valuation pressure. The specific events that triggered its worst average declines include the 2022 shock and the Summer-Fall 2023 5% Yield Shock. This history provides a clear picture of the amplified downside risk shareholders carry.
The 17-Month Climb After The 2022 Shock
Surviving the fall is one thing; waiting for the recovery is another. Of the shocks it has fully recovered from, Joby Aviation took a median of about 4 months to climb back to its pre-shock high. That may sound manageable, but the outliers test an investor’s patience.
Its slowest full recovery was after the 2022 Inflation Shock and a period of monetary tightening, which took about 17 months to reclaim the prior high. That is a long time to be underwater. While some past recoveries have been relatively swift, there is no guarantee the next one will follow the same pattern.
Every Major Shock Joby Aviation Has Traded Through
Peak-to-trough drawdown in each shock, and how long the stock took to reclaim its pre-shock high. Stock vs. the S&P 500, long-duration bonds, and its sector.
| Shock Event | Stock | S&P 500 | Bonds | Sector | Recovery |
|---|---|---|---|---|---|
| 2022 Inflation Shock & Fed Tightening | -51% | -24% | -35% | -20% | ~17 mo |
| 2023 SVB Regional Banking Crisis | -11% | -6.7% | -4.3% | -6.2% | ~3 mo |
| Summer-Fall 2023 Five Percent Yield Shock | -38% | -9.5% | -17% | -12% | ~16 mo |
| 2024 Yen Carry Trade Unwind | -5.4% | -7.8% | -1.2% | -1.1% | ~4 mo |
| 2025 US Tariff Shock | -30% | -19% | -3.8% | -16% | ~3 mo |
[1] 2022 Inflation Shock & Fed Tightening: 9.1% CPI forced aggressive rate hikes, crushing both stocks and bonds simultaneously.
[2] 2023 SVB Regional Banking Crisis: SVB’s rate-driven bond losses triggered a social-media bank run, seized by FDIC.
[3] Summer-Fall 2023 Five Percent Yield Shock: Strong economic data pushed 10-year yields to 5%, compressing yield-sensitive sector valuations.
[4] 2024 Yen Carry Trade Unwind: BOJ rate hike unwound yen carry trades, briefly crashing tech stocks globally.
[5] 2025 US Tariff Shock: 145% China tariffs crashed equities and the dollar on supply chain disruption fears.
Is Today’s Joby Aviation A Different Company?
Of course, Joby Aviation is not the same company it was during those earlier shocks. Today, it has a much stronger balance sheet, holding approximately $2.5 billion in cash and equivalents as of its last report. Operationally, it is making tangible progress, now producing parts for its ninth conforming aircraft and conducting high-profile demonstration flights. This growing maturity and financial cushion could make it more resilient in a future downturn.
However, the fundamental risks of a pre-commercialization venture remain. The company’s operating margin over the trailing twelve months is -1017.0%, a stark reminder of its current cash burn. While the business is more advanced, its stock likely remains highly sensitive to market sentiment and risk appetite, suggesting the historical pattern of amplified drawdowns is still a relevant guide to the risks involved.
A 10% Hit To Your Portfolio
To make this tangible, consider the portfolio impact. That deepest 51% drawdown on a position sized at 10% of a portfolio would have cut about 5% from the whole portfolio. At a 20% position weight, the hit would have been about 10%. Can you stomach that kind of impact on your total net worth, and hold on for a recovery that could take over a year?
The one lever you fully control is your exposure. How much of your capital you allocate to a single, high-risk name is the most critical decision. Watching for continued progress in the eIPP program is key, but the most sensible response to this level of risk is disciplined position sizing.
How Much Downside Is Hiding In The Rest Of Your Portfolio?
You have just seen, in hard numbers, how far Joby Aviation has fallen when markets break, and how long it took to climb back. The natural next question is how much the rest of what you own could fall, and the options market puts a forward number on exactly that: the expected move it prices in for each stock over the year ahead. Our Expected Move screen ranks which S&P 500 names carry the widest priced-in swings, so you can see whether your other holdings are sitting on more downside than you have accounted for.
So, Where Should A Stock That Can Fall This Far Actually Sit?
The first instinct is to spread it out, and that is a real step. Owning an airport services ETF like IYT instead of just the one name takes the single-company risk off the table, so a rough stretch at Joby Aviation alone no longer decides your year.
But a sector basket is still one sector. You get the laggards alongside the leaders, and as the table above shows, the whole group still falls when the market breaks. Spreading single-stock risk is not the same as managing risk. That is the gap the Trefis High Quality (HQ) Portfolio is built to close: not a whole index, the 30 strongest names across sectors, sized and rebalanced with rules so no one company, or sector, decides your year. It has a track record of outpacing a benchmark that combines all major indices – the S&P 500, S&P Mid-cap, and Russell 2000.