In this article, we will discuss the 8 Best Vertical Farming and Hydroponic Stocks to Invest In.
Vertical farming refers to producing food in vertically stacked layers, like in a used warehouse, skyscraper, or shipping container. Hydroponic agriculture refers to a technique for cultivating plants without traditional soil and replacing them with a mineral solution placed around plant roots.
The global agricultural sector continues to undergo a transformative shift. This transition stems from the increased demand for sustainable, efficient, and locally-produced food. Innovative strategies such as vertical farming and controlled environment agriculture (CEA) have emerged and these are offering promising solutions to revolutionize food production.
There are several SMEs and start-ups leading the charge in vertical farming and controlled environment agriculture. Ranging from small-scale urban farms to well-established high-tech agricultural operations, these organizations have been revolutionizing food production, courtesy of innovation, sustainability, and efficiency. For example, AeroFarms has been reforming agriculture with its advanced aeroponic systems. These systems utilize 95% less water and 99% less land when compared to traditional methods. Also, the company’s fully automated systems grow pesticide-free leafy greens year-round, offering superior flavor and nutrition.
Another company is Zero Carbon Farms, which focuses on repurposing underground air raid shelters in London into climate-controlled vertical farms. The company’s innovation capabilities help in growing microgreens and herbs by using 70%-90% less water and 95% less fertilizer than traditional agriculture. By carrying out operations underground, it significantly reduces emissions while offering fresh produce locally.
Growth Drivers and Trends – Vertical Farming and Hydroponics
As per IMARC Group, US hydroponics market size touched US$3.3 billion in 2024. Moving forward, the market is expected to reach US$6.5 billion by 2033. The increasing need among critical players to provide a more resilient and efficient approach to food production, as a result of evolving environmental and demographic pressures, has been fueling market growth across the country. A transition towards innovative and sustainable agricultural practices is one of the critical trends driving growth in the hydroponics market.
The global vertical farming market was pegged at US$6.8 billion in 2024, according to IMARC. This market should reach US$36.8 billion by 2033. The increased demand for sustainable agriculture methods, robust advancements in hydroponics, aeroponics, and aquaponics focused on improving crop yields, and implementation of favorable government policies are some of the drivers fueling this market growth. Also, several governing bodies have been acknowledging the advantages of vertical farming in improving food security and lowering environmental effects.
With this in mind, we will now have a look at the 8 Best Vertical Farming and Hydroponic Stocks to Invest In
A combine harvesting crops, showing the capabilities of the company’s agriculture equipment.
Our Methodology
To list the 8 Best Vertical Farming and Hydroponic Stocks to Invest In, we conducted extensive research and sifted through several online rankings. After the research, we chose the following 8 stocks which were popular among hedge funds and that analysts saw upside to. Finally, the stocks were arranged in ascending order of the hedge fund sentiment surrounding them.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
8 Best Vertical Farming and Hydroponic Stocks to Invest In
8) Local Bounti Corporation (NYSE:LOCL)
Number of Hedge Fund Holders: N/A
Local Bounti Corporation (NYSE:LOCL) uses vertical farming techniques, growing plants in stacked layers within controlled indoor environments. This maximizes space utilization and allows for year-round production. Local Bounti Corporation (NYSE:LOCL)’s patented Stack & Flow Technology® has been tagged as a key innovation, improving crop yields, output, and economics. The company’s indoor farming practices are regarded as more sustainable than traditional methods, using significantly less land and water.
Wall Street analysts remain optimistic about Local Bounti Corporation (NYSE:LOCL)’s growth prospects given that it received a 2-year award from a large multinational retailer to supply its living butter lettuce product to 13 of the retailer’s distribution centers from its California and new Texas facilities. While the retailer’s name was not disclosed in the press release, the agreement reflects the growing demand for fresh, sustainable, locally grown produce and demonstrates Local Bounti Corporation (NYSE:LOCL)’s commitment to addressing such needs via expanded operations throughout the southern US. The company expects that this strategic partnership will enhance its performance and can help in achieving positive adjusted EBITDA, which is expected during Q2 2025.
Furthermore, there are plans to build additional capacity across the Local Bounti Corporation (NYSE:LOCL)’s network of facilities enabled by its Stack & Flow Technology®. The planned expansions are focused on providing additional capacity and enabling the company’s growing product assortment to address existing demand from its direct relationships with blue-chip retailers and distributors. This strategy has been yielding results. In Q3 2024, Local Bounti Corporation (NYSE:LOCL) delivered a 50% YoY growth in sales while advancing its commercial strategy via expansion of product mix and deepening relationships with blue-chip retail partners. Wall Street analysts offered a 1-year price objective of $8.16 on the shares of the company.
7) Agrify Corporation (NASDAQ:AGFY)
Number of Hedge Fund Holders: 1
Agrify Corporation (NASDAQ:AGFY) operates in the controlled-environment agriculture (CEA) industry, specializing in advanced cultivation solutions. The company’s product portfolio includes Vertical Farming Units (VFUs) that use a modular and stackable design to enable cultivation in a vertical setup, a hallmark of vertical farming. Agrify Corporation (NASDAQ:AGFY) focuses on high-value crops such as cannabis for growth because of market dynamics, and its proprietary technology’s suitability for such crops. It is suitable because the proprietary technology results in cost and resource efficiency, scalability and flexibility, and data-driven cultivation.
Wall Street analysts opine that Agrify Corporation (NASDAQ:AGFY)’s VFUs allow precise control over temperature, humidity, lighting, CO₂ levels, and nutrient delivery for each crop tier. Furthermore, with the company’s focus on high-value crops such as cannabis, these VFUs offer growers the tools to meet strict regulatory standards and produce premium-grade products. On a related note, Agrify Corporation (NASDAQ:AGFY) closed on its previously announced acquisition of certain assets from Double or Nothing LLC, the owner and creator of the Señorita brand of hemp-derived THC drinks.
Wall Street analysts believe that growth in cannabis production should benefit Agrify Corporation (NASDAQ:AGFY). This is because cannabis production is subject to strict regulations regarding quality, potency, and consistency. Agrify Corporation (NASDAQ:AGFY)’s vertical farming units enable growers to meet these standards with precision.
