3 Growth Stocks That Beat the S&P 500 in 2024 but Are Still Worth Buying in 2025

Beating the S&P 500 in 2024 was no easy task, even for growth stocks.

The index posted a more than 20% gain for the second consecutive year. But Archer Aviation (NYSE: ACHR), Pentair (NYSE: PNR), and Meta Platforms (NASDAQ: META) did even better.

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Here's why all three growth stocks are still worth buying in 2025.

Image source: Getty Images.

After a strong 2024, Archer Aviation can continue gaining altitude in the coming year

Scott Levine (Archer Aviation): In addition to positive analyst coverage and the formation of a new partnership in the Middle East, a variety of factors provided a lift for Archer Aviation stock, helping it to soar nearly 59% higher in 2024. Investors who haven't decided to pick up shares of the electric vertical take-off and landing (eVTOL) aircraft may fear that it's too late now after the stock's impressive rise. This seems a little shortsighted, though, as there are catalysts in 2025 that can boost shares even higher.

One of Archer's major feats in 2024 was the completion of its high-volume manufacturing facility in Georgia. And while the market bid Archer stock higher on news of the achievement, it's plausible that the market will do so again if the company achieves another success with the facility: hitting the production target. Management has articulated a goal of commencing aircraft production early in 2025 with the added goal of scaling up production to total two aircraft per month by the end of the year. In addition to building investor confidence in management, the achievement would suggest that the company is that much closer to generating revenue.

From inking a deal with Anduril to expanding the locations where it plans to operate, Archer continues securing new growth opportunities. And while investors have celebrated these developments, they will likely propel the stock even higher when the company receives the requisite Federal Aviation Administration certifications and begins commercial operations. Of course, risks are still inherent with a disruptive company such as Archer, but for those seeking high-growth opportunities, Archer hits the mark.

A great value growth stock

Lee Samaha (Pentair): The water technology company Pentair designs and produces pool products, fluid treatment and pump systems, and commercial and residential water systems. Its 38.4% return in 2024 outperformed the S&P 500 index, and there are four key reasons to believe it can also do so in 2025.

First, last year wasn't a great year for new pool construction, with relatively high interest rates curtailing spending on new pools. For example, Pentair's CEO John Stauch expects 60,000 new pools in the U.S. in 2024 compared to 72,000 in 2023. The decline negatively impacts discretionary spending on pools, but with a lower interest rate in 2025, that headwind could turn into a tailwind if new pool construction grows again.

Second, despite the new pool growth, the installed base of swimming pools is still growing, meaning more non-discretionary spending on pools -- about 80% of the pool segment comes from the existing installed base of pools.

Third, management has an ongoing transformational initiative to expand profit margins and drive sales. This initiative involves implementing targeted pricing initiatives (to extract value from its most attractive product lines), improved sourcing (including consolidating myriad suppliers and improving bargaining power in the process), and lean management techniques.

Finally, with Wall Street expecting mid-teens earnings growth in 2024 and 2025, and trading just over 20 times 2025 earnings, Pentair is an excellent value for a company with strong long-term growth prospects.

Meta is a proven winner in the age of AI

Daniel Foelber (Meta Platforms): Between 2023 and the end of 2024, Meta Platforms surged a staggering 386.5% -- pole-vaulting its market cap to $1.48 trillion. It's hard to imagine how a stock with that kind of gain in a relatively short period can still be a good value. But Meta Platforms was dirt cheap heading into 2023. Since then, it has expanded margins and grown earnings at a breakneck pace even as it pours money into research and development (R&D) and artificial intelligence (AI).

Consider that as a percentage of revenue, Meta spends a staggering 27% of its revenue on R&D. No other company with a market cap over $1 trillion even comes close to that level.

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

What impresses me the most about Meta is that it sports 40% operating margins and rapid revenue growth, and yet it spends so much on long-term projects. If it weren't making those investments, its near-term profits would be much higher, and thus, the stock would look like even more of a bargain.

Over the last couple of years, the story on Meta has been its impeccable monetization of AI through Instagram, which has become arguably the most valuable digital real estate out there. Instagram was built for mobile users, while Alphabet's YouTube is native to desktops. That distinct difference is why I think Meta will eventually overtake Alphabet in market cap by 2026.

Over the next few years, the investment thesis around Meta could eventually include some of the ultra-long-term plays developed by its Reality Labs division (which is soaking up the R&D spending). At his keynote address at the major tech conference CES, Nvidia CEO Jensen Huang discussed a roadmap for the future of AI -- which included an evolution from perception AI to generative AI for digital marketing and content creation; to agentic AI for coding, customer service, patient care, and more; to physical AI for self-driving cars and general robotics. In other words, the next phases of AI will blend the physical world with the digital world, according to Nvidia.

Meta is a social media company that mainly plays in the generative AI space. Still, Reality Labs focuses a lot on virtual and augmented reality, which could thrive under Nvidia's projected AI growth path.

With a price-to-earnings (P/E) ratio of 29.1 and a forward P/E of 24.3, Meta remains a compelling value given the cash cow nature of its existing business model and its potential upside if it continues to ride the AI wave.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel Foelber has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.