AIM’s 30th birthday: best stocks and what the future holds

London’s AIM market is now 30 years old. How time flies. And it’s been an action-packed three decades for investors in the smaller growth companies that AIM was designed for.

Launching in 1995 with just 10 companies valued at £82 million, growth businesses wanting a higher profile and extra cash flocked to AIM. At its peak in 2007 there were 1,694 constituents. Now there are 663 companies worth a combined £69 billion.

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Over the years, it’s proved a popular destination for miners and oil explorers, developers of new technologies, green energy and biotech. More than 4,000 companies have raised almost £136 billion on AIM, according to latest published data. And analysis conducted by Grant Thornton found that in 2023, AIM companies contributed £68 billion in Gross Value Added (GVA) to the UK economy and supported over 770,000 jobs.

There’s a perception, too, that all companies on AIM are small and high risk, but that’s simply not true. AIM’s largest company, Jet2 Ordinary Shares (LSE:JET2), is currently valued at £3.8 billion, equivalent to companies such as British Land Co (LSE:BLND), Burberry Group (LSE:BRBY) and JD Sports Fashion (LSE:JD.), which are almost big enough for the FTSE 100 index. More than 30 AIM companies are capitalised at more than £400 million, which would secure them entry to the FTSE 250 index if they wished.

AIM companies valued at £1bn or more

Source: ShareScope 18 June 2025. Past performance is not a guide to future performance.

Investment highlights

There’s little doubt that AIM has made a great contribution to the economy and provided investors access to some truly excellent companies, large and small. And there have been stellar gains for investors over the 30 years.

Within five years of launch the FTSE AIM All-Share index had nearly tripled in value, peaking above 2,900 in March 2000 when the dotcom boom was in full swing. There have been significant periods of outperformance in the years after, including an impressive recovery from the Trump tariff crash in April, since when the three most important AIM indices top the global performance tables.

Source: ShareScope 17 June 2025.

Celebrating life-changing profits

Award-winning AIM writer Andrew Hore mentioned a number of the best-performing AIM shares in his recent article for interactive investor. They’re all up well over 1,000%, way more than anything the FTSE 100 or FTSE 250 could muster. But even these incredible returns are just a snapshot in time, recording performance between two dates. Many more stocks have risen significantly, even if some have given a bit or all of it back.

This year alone, 30 AIM companies have doubled in value. Fiinu (LSE:BANK), whose Plugin Overdraft product allows customers to have an overdraft without changing their existing bank, is currently up 1,250% in 2025 but has been up as much as 2,900% since mid-January.

Another excellent example right now is Metals One (LSE:MET1). Just a few months ago shares in the company, which is exploring for critical minerals used in clean batteries such as copper, nickel, cobalt and zinc, were trading as low as 1.76p. They peaked at 55p in May for a gain of over 3,000%.

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Going back a few years, many investors will remember Novacyt SA (LSE:NCYT). After developing a popular test for Covid-19, its share price soared by an astonishing 21,000%, from 6p to over £12 in just 12 months.

Three years after the outbreak of Covid, we reported on the best-performing AIM companies since the pandemic, among them Premier African Minerals Ltd (LSE:PREM) with a 1,310% gain, Quantum Blockchain Technologies (LSE:QBT) up 1,200% and Kodal Minerals (LSE:KOD) up 1,100%. Many others were up 500% or more.

Before the pandemic, Modern Water had rallied 500% from 6.3p early in 2017 to over 38p a few months later. The membrane water treatment solutions company has since been taken over.

Around the same time, we wrote about 12 companies that had risen by more than 1,000% over the previous nine years. These included ticketing and queuing technology provider accesso Technology Group (LSE:ACSO) (formerly Lo-Q), online fashion retailer ASOS (LSE:ASC), healthcare investment company Hutchmed (China) Ltd, Solid State (LSE:SOLI) and Judges Scientific (LSE:JDG).  

Most of the 12 have gone even higher since, including Solid State which was worth less than 4p in April 2009. It peaked at over 300p a year ago. Before leaving AIM in 2022, ASOS had risen from a 3-10p range in the early noughties to a high above 7,700p in 2018. 

What does the future hold for AIM?

While it’s right to celebrate its successes, it’s also necessary to acknowledge problems and issues that AIM faces 30 years on.

AIM has enjoyed a decent few months in terms of price performance, and there are plenty of high-performing individual stocks. But compared with other markets, longer-term returns have been poor. Over the past five years, AIM is down 14% compared with significant gains for most other global indices like the S&P 500 which is up 92%. There are modest gains over a 10-year period, but again, the S&P 500 is up 183% and the Nasdaq Composite tech index 282%.

Rising interest rates take a lot of the blame for AIM’s recent underperformance. Growth companies must borrow to grow, so an end to the era of cheap money that had followed the financial crisis then the pandemic, came as a huge blow to smaller businesses. Rather than paying 0.1% near the end of 2021, borrowers were paying over 5% by the summer of 2023. That increase in costs hits profit and stifles investment.

AIM has also suffered a drop in popularity. In March, accountancy group UHY Hacker Young reported that the number of companies on AIM had reached the lowest level since 2001. It said cost and excessive red tape were among reasons cited for leaving AIM. According to the British Business Bank, it costs around £600,000 to list there and £500,000 a year to maintain a listing.

IPOs are also at their lowest since the 2008-09 financial crisis, said UHY, with many companies choosing private equity as a cheaper way to raise cash. Reducing some regulations could help AIM, and the government is concerned enough to be engaging with regulators.  

“The AIM market needs all the help it can get to boost the numbers of companies listed on its exchange and the liquidity of the shares traded,” says UHY. “Possible changes to Cash ISAs may help as UK savers may then be encouraged to invest directly in shares.”

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Investment by pension funds into UK small caps has also “collapsed” in recent years, found a recent report by New Financial, sponsored by Aberdeen, with just one Local Government Pension Scheme having a specific allocation to UK smaller companies. In 2013, it was 18.

“Eventually we will be left with a tiny, illiquid market,” warns Abby Glennie, co-manager of the abrdn UK Smaller Companies fund and the abrdn UK Smaller Companies Growth Ord (LSE:AUSC) trust. “That’s fine for small, individual investors but will make it very hard to get large-scale institutional money into the growth companies of tomorrow. In that scenario, we need to be asking: how are we going to nurture the next generation of big UK companies?”

Much will depend on broader investor sentiment once there is greater clarity around geopolitical events, Trump’s tariffs, inflation, interest rates and the global economy. But AIM would also benefit from government intervention to boost economic growth and encourage more pension money into smaller UK companies.

Because of its underperformance, there is a fear that AIM has lost its way and is a less attractive destination for investor cash. But negative sentiment and outflows mean UK smaller companies are trading at significant discounts to historic levels. Aberdeen found that UK small caps are currently on a discount of -14.6% compared to their 10-year average.

While investing in AIM stocks clearly involves greater risk, and picking winners requires homework, ignoring AIM carries its own risk of missing out on some great stories and potentially lucrative investment opportunities.