When it comes to uncovering the next big opportunity, the AIM market can be a goldmine. Some of the most exciting growth stock stories start here, in small companies that quietly build world-class technology.
Right now, with artificial intelligence (AI) spreading into sectors as varied as aerospace, defence, telecommunications and healthcare, there’s a whole tier of specialist firms fuelling the revolution from behind the scenes.
The headlines might be dominated by multi-billion-dollar tech giants, but they can’t do it all. AI’s success often hinges on the niche players making the hardware, components and energy solutions that keep the whole system running.
Two small-cap UK growth stocks in particular have caught my attention for their potential to ride the AI wave.
Filtronic
Filtronic‘s (LSE: FTC) in the business of high-performance radio frequency (RF) technology. Essentially, it could give AI systems in aerospace and defence their ‘eyes and ears’. Its products provide the precision, bandwidth and fidelity that AI needs to process real-time data and make split-second decisions — which is why demand’s been accelerating.
Over the past year, its market value has more than doubled to roughly £295m, while the share price has soared by around 116%. Revenues have climbed to £56.3m, representing a 121% increase on the previous year, and earnings have surged more than threefold.
Filtronic’s order book has been bolstered by a £3m contract with the European Space Agency in 2023 and, more recently, a record-breaking $32.5m order from SpaceX in June 2025.
With a price-to-earnings (P/E) ratio sitting at 23.8 and very low debt relative to equity, the balance sheet looks solid.
But it’s not without risk. Competition from US heavyweights like Skyworks Solutions, Qorvo and Teledyne ETM is intense. And with so much of its income tied to large individual contracts, any failure to renew could put a dent in profits.
Ilika
Ilika‘s (LSE: IKA) taking a different route into the AI ecosystem. It develops solid-state batteries that can support both tiny embedded AI devices and large-scale AI infrastructure. These batteries offer high energy density, faster charging, and better safety than traditional lithium-ion cells — qualities that make them ideal for applications where reliability and compactness are crucial.
Although Ilika remains loss-making, with a recent annual shortfall of £5.9m, sales momentum’s impressive, with revenues growing by 265% year on year. The firm’s market capitalisation now stands at just under £70m, with shares trading around 39p. Earnings have slipped by about 16%, but the company holds just £470k in debt against £17.2m of equity, leaving it in a relatively strong financial position for a micro-cap.
That said, with practically no cash flow, it still depends heavily on investor confidence to fund research and expansion. Any slip-up in earnings could send the stock spiralling.
The risk/reward game
Small-cap shares always carry elevated risks, but they’re also where some of the most rewarding returns can be found. For investors seeking early exposure to AI-related growth stocks, Filtronic and Ilika offer two very different but equally intriguing opportunities to consider.
As always, due diligence is essential, but both companies show how the AI boom isn’t just about the glittering names — it’s also about the innovative specialists working quietly in the shadows.
