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The FTSE 100 has reached fresh highs this year, leaving many companies looking expensive and arguably less appealing. I still keep the bulk of my portfolio in large-cap Footsie stocks for stability and long-term growth. But when it comes to digging out potential gems, I often think the Alternative Investment Market (AIM) deserves more attention.
AIM is home to smaller, fast-growing firms that the broader market sometimes struggles to value fairly. There’s no denying the risks — limited liquidity, smaller balance sheets, and greater vulnerability to shocks. Still, the potential rewards can be worth weighing up. With that in mind, here are two AIM names I think investors might want to check out.
Jet2
Jet2 (LSE: JET2) has become a surprise social media star lately, thanks to a catchy marketing tune that went viral as a meme. The airline could have ignored the attention, but instead it embraced it – and in doing so boosted visibility with its core demographic of younger travellers.
Whether this turns into lasting customer loyalty is hard to judge, but in a sector where Ryanair and easyJet have struggled with image issues, Jet2’s savvy approach is noteworthy.
Financially, the company has made real progress. In its latest half-year results, it reported an 11% rise in profits to £577.7m and record revenues of £7.2bn. Earnings are up 7.7% year on year, and the stock trades on a low price-to-earnings (P/E) ratio of 8.3. To me, that suggests the market may not have fully priced in the growth potential.
That said, risks remain. Oil prices are a constant pressure on margins, and geopolitical conflicts have the potential to push jet fuel costs higher. Consumer sentiment is another factor – demand for package holidays can be hit hard if household budgets tighten.
Still, Jet2 has shown resilience and a knack for clever marketing. For investors weighing up a budget airline to consider, I think this is one AIM stock worth a closer look.
Pan African Resources
Gold miners have enjoyed a resurgence in 2025 as investors look for safe havens, and Pan African Resources (LSE: PAF) has been one of the standouts. Its share price has soared 139% this year, which might suggest the best opportunities are gone.
Yet the forward P/E ratio is only 6.8, pointing to strong earnings growth expectations.
The numbers back that up. Revenue rose 40.4% year on year, while earnings climbed 66.5%. Profitability has improved too, with net margin jumping from 19% to 26% in just two years. Those figures are impressive by any standard.
The concern, however, lies with debt. Borrowings have risen sharply from £44.7m in 2023 to £141m today. While equity currently covers the load, the pace of increase is something investors should weigh up carefully.
Even so, the combination of strong margins, robust earnings growth, and supportive gold prices makes Pan African Resources a name I think investors should consider if they’re seeking AIM exposure to the commodities sector.
AIM stocks come with volatility, but Jet2 and Pan African show there are still exciting opportunities outside the FTSE 100 and FTSE 250.
For me, they’re two names worth checking out as potential long-term winners.
