Top Growth Stocks to Watch as Archer Aviation, Pentair, and Meta Outperform the S&P 500 in 2024

The S&P 500 continued its upward trend, achieving over a 20% gain for the second straight year in 2024. Notably, Archer Aviation (NYSE: ACHR), Pentair (NYSE: PNR), and Meta Platforms (NASDAQ: META) surpassed this benchmark.

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Here’s an evaluation of why each of these growth stocks holds promise for 2025.

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Archer Aviation Eyes Continued Growth After a Successful 2024

Scott Levine (Archer Aviation): The stock price of Archer Aviation climbed nearly 59% in 2024, buoyed by positive analyst coverage and a new partnership in the Middle East. Those hesitant to invest might think it’s too late, but upcoming developments may further enhance the stock’s value.

Among its successes, Archer completed a high-volume manufacturing facility in Georgia. This milestone raised investor expectations, and it could do so again if the company meets its production targets of two aircraft per month by the year’s end. Achieving this goal would not only boost confidence but would also inch Archer closer to generating revenue.

In addition to expanding its operational locations and securing deals, Archer is preparing for commercial operations pending necessary Federal Aviation Administration certifications. While investing in a disruptive company comes with risks, Archer represents an appealing opportunity for those seeking high-growth options.

Pentair: A Growth Stock with Strong Fundamentals

Lee Samaha (Pentair): The water technology company Pentair experienced a 38.4% return in 2024, outperforming the S&P 500 index. Several factors indicate it can maintain this momentum in 2025.

Firstly, new pool construction was down last year due to high interest rates. Pentair’s CEO forecasts 60,000 new pools in the U.S. for 2024, a drop from 72,000 in 2023. However, if interest rates decrease, spending on pools could rebound.

Secondly, many existing pools also require maintenance, creating steady demand. Approximately 80% of Pentair’s revenue comes from servicing its installed base.

Thirdly, the management team has initiated transformative strategies aimed at boosting profit margins. These strategies include optimizing pricing, enhancing supplier relationships, and incorporating lean management practices.

Lastly, Wall Street projects mid-teens earnings growth for 2024 and 2025, making Pentair a strong value play at just over 20 times its anticipated 2025 earnings.

Meta Platforms Remains a Major Player in the AI Space

Daniel Foelber (Meta Platforms): Meta achieved an extraordinary 386.5% increase from 2023 to the end of 2024, bringing its market cap to $1.48 trillion. This dramatic rise raises questions about its value, yet it was considerably undervalued at the beginning of 2023.

The company has notably improved its profit margins and earnings while investing heavily—27% of revenue—into research and development, particularly within artificial intelligence (AI).

META R&D to Revenue (TTM) data by YCharts

Meta impressively combines high operating margins with significant investment in long-term projects. Its monetization strategies on platforms like Instagram position it strongly against competitors, with potential market cap growth as AI continues to evolve.

As the AI landscape progresses, Meta’s Reality Labs division is well-positioned to adapt. Nvidia’s CEO outlined a future in which AI will intertwine physical and digital interactions—an area where Meta is poised to flourish.

Despite its current P/E ratio of 29.1 and a forward P/E of 24.3, Meta offers compelling value, driven by its robust business model and the anticipated rise of AI.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, serves on The Motley Fool’s board. Suzanne Frey, an executive at Alphabet, also holds a position on the board. John Mackey, former CEO of Whole Foods Market, is another board member. Daniel Foelber, Lee Samaha, and Scott Levine hold no positions in any mentioned stocks. The Motley Fool has vested interests in and recommends several technology companies, including Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends Broadcom and has disclosure policies on stock practices.

The views and opinions expressed here are those of the author and do not necessarily reflect those of Nasdaq, Inc.