In this piece, we will cover 10 Best Lithium and Battery Stocks to Buy Now.
The pivotal role that lithium is playing in the market of batteries, solar panels, and chemicals has resulted in a surge in its global demand, and as such, the lithium market has seen quite a growth in recent years; the market is set to grow from $8.8 billion market size in 2023 to hit $28.45 billion mark in 2033, boasting a CAGR of 12.5%, according to Precedence Research.
On the other hand, the global electric vehicles market size is set to reach $1.579 trillion by 2030 from its market size of $500.48 billion in 2023. This is so because of improved fuel economy and costs, and more importantly, reduced emissions from electric vehicles. Furthermore, according to the International Energy Agency’s (IEA) forecast, global electric car sales are set to grow to 17 million by the end of 2024 from its sales volume of almost 14 million in 2023, 95% of which belonged to China, U.S. and Europe; 65% of new electric cars’ registrations were made in China in 2023, while 25% and 10% registrations were made in Europe and China, respectively! On the back of this, lithium demand and hence, consumption, is set to soar 16% per annum to help it grow from 1,219kt lithium carbonate equivalent (LCE) in 2024 to 2,261kt LCE in 2029, according to Techopedia.
The EV batteries market, 95% of whose growth is accounted for by the electric cars market, saw its demand growing 40% in 2023 in relation to the 2022 demand level, wherein, it grew to 750 GWh. Regions like China, Europe, and the U.S. are again, the fastest growing in terms of EV battery sales as well, as the EV battery market reached 415 GWh, 185 GWh, and 100 GWh in the three regions, respectively, according to IEA.
In terms of regions that are topping the charts of lithium production, Australia, Chile, and China are the top three countries, with their 2023 mine productions standing at levels of 86,000 MT, 44,000 MT, and 33,000 MT, respectively. China, which has relied a lot on lithium imports, found a million metric ton lithium reserve in its province of Sichuan in January 2024.
However, lithium and EV battery industries have been experiencing a downhill in 2024 in terms of raw material prices, wherein, the excess supply has resulted in a fall in various battery metals’ prices, resulting in a reduction in EV prices as well. The average price of an EV in the U.S. saw a downtick of 24.2% in December 2023, as compared to its peak price in the second quarter of 2022. This is on the back of a drop in prices of the highest-cost metals – lithium and nickel. Lithium carbonate ended 2023 at the price level of $13,575 per metric ton, falling 80.9% as compared to its 2023 high, and 81.4% in relation to its 2022 high. Nickel, on the other hand, saw its price falling 47.3% from its 2023 high, ending 2023 at $16,375 per ton.
With this, let’s now look at the 10 Best Lithium and Battery Stocks to Buy Now.
A close-up of a lithium-ion battery surrounded by a network of silicon nanowires.
Methodology
We created this list of 10 Best Lithium and Battery Stocks to Buy Now by listing down companies that operate within the broader market of metals, pertaining specifically to areas of lithium mining, battery sales, and tech relating to batteries. Then, we narrowed down the companies, with their respective upside potential and then ranked the stocks on the number of hedge fund investors in the respective stocks, as of Q1, 2024, using Insider Monkey’s database that tracks 920 hedge funds.
For stocks with an equal number of hedge fund holders, we used their upside potential as the tiebreaker. With this, we now present to you our list of 10 Best Lithium and Battery Stocks to Buy Now.
Why are we interested in 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).
10. Piedmont Lithium Inc. (NASDAQ:PLL)
Number of hedge fund investors: 7
Piedmont Lithium Inc. (NASDAQ:PLL), based in the U.S., is a mining company focusing on lithium reserves in U.S., Canada, and Ghana. 7 hedge fund investors have grabbed the shares of the stock, valuing $9.2 million.
Piedmont Lithium Inc. (NASDAQ:PLL) outlook seems to be quite bright, as the investors’ consensus looks at a share price of $39.42, as compared to its current price of $10.08; and that’s a stock with an upside potential of massive 291%! In terms of ratings, six analysts are reported to be giving a buy rating for the stock, while four analysts are giving a hold rating for the stock.
Developments are made at the North American Lithium (NAL) operation in Quebec, in which the company holds a 25% stake. The operation, which is all about lithium mineral reserves – also, regarded as North America’s biggest lithium project – is set to further get expanded in 2024, as additional 30,000 meters of drilling is set to take place, promising even higher lithium reserve, as previously estimated (21.7 million tons). It was announced in the company’s press release on June 20, 2024.
9. Critical Metals Corp. (NASDAQ:CRML)
Number of hedge fund investors: 8
Critical Metals Corp. (NASDAQ:CRML) is a producer and miner of local lithium in Austria, servicing the European battery market. The company is the output of the merger of European Lithium and Sizzle Acquisition Corp, which came into existence on 28th February 2024, by getting listed on NASDAQ exchange.
As of the last quarter of 2023, there were no hedge funding holdings in the stock understandably; however, as of 1st quarter of 2024, 8 hedge funds already hold investments in the stock, worth $200,000.
This is on the back of European Lithium’s controlling interest in the Wolfsberg lithium project in Carinthia, Austria, which, if all goes as planned, will be Europe’s only battery-grade lithium mine by 2027.
Furthermore, previously, Critical Metals Corp. (NASDAQ:CRML) through its parent company, European Lithium, had also reached a 50:50 joint venture agreement with Obeikan Group in Saudi Arabia in June 2023, whereby, it would be converting lithium concentrate into lithium hydroxide. Thus, Critical Metals Corp. (NASDAQ:CRML) is set to grow and excel in the lithium sector in the coming times, helping it score a place in our list of Best Lithium and Battery Stocks to Buy Now. It also has completed the initial investment for the acquisition of Tanbreez, which is one of the biggest rare earth deposits in Greenland.
8. Sociedad Química y Minera de Chile S.A. (NYSE:SQM)
Number of hedge fund investors: 13
Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is one of the biggest lithium producers, along with being a producer of plant nutrients and iodine as well.
For the full year 2023, the company recorded a net income of $2 billion, while the EPS was recorded at $7; while their revenue was down in value terms, the volume sales saw an uptick of 10%, selling 170,000 metric tons. Following is what was disclosed by the CEO regarding the company’s lithium segment after the end of Q1 2024:
“In the lithium business, as detailed below, we have completed the new expansion of our lithium carbonate facility in Chile, reaching 210,000 metric tons per year, and continued to work on a series of initiatives related to efficiency, quality, and process improvements to expand this production capacity to 240,000 metric tons per year in 2025, thus adding incremental 30,000 metric tons per year of lithium carbonate capacity. Our lithium hydroxide capacity (conversion from lithium carbonate) has reached 40,000 metric tons per year and we remain on track to increase our total lithium hydroxide capacity in Chile to 100,000 metric tons per year in 2025.”
Hedge fund investors’ investments in the stock total $20.5 million, with Bronte Capital having the biggest chunk in it, worth $7.1 million. The current share price of the stock, $40.84, is expected to increase to $62.55, based on analysts’ opinion and that would mean an upside potential of the stock being astonishing 53.2%, explaining why the stock is here in our list of Best Lithium and Battery Stocks to Buy Now.
7. Lifezone Metals Limited (NYSE:LZM)
Number of hedge fund investors: 14
Lifezone Metals Limited (NYSE:LZM) is engaged in the extraction, processing, and recycling of battery metals, using its Hydromet Technology.
The hedge fund investors’ stake in the stock is on the rise, as 1 more hedge fund investor has taken up a stake in the stock, taking the total invested value of the stock to $34.2 million.
Analysts are looking at the stock’s outlook in an optimistic manner, as they are looking at a target price of $14.34, in relation to its current price of $6.83, as of writing this article. This would mean an upside potential of roughly 110%, helping it score a place in our list of 10 Best Lithium and Battery Stocks to Buy Now.
6. FREYR Battery, Inc. (NYSE:FREY)
Number of hedge fund investors: 19
To cut down on global emissions, FREYR Battery, Inc. (NYSE:FREY) is engaged in the provision of industry-standard battery solutions. FREYR Battery, Inc. (NYSE:FREY) scored an achievement in terms of its operational excellence, as it managed to turn in the first production of chargeable unit cells for testing purposes on 20th June 2024 – and all was done through an automated process.
The number of hedge fund investors skyrocketed over the last two quarters, as the number rose from 11 hedge fund investors, as of Q4 2023, to 19 hedge fund investors, as of Q1 2024. The current hedge fund investments in the stock total $34.1 million! In addition to this, the analysts eye a target price of $2, in relation to its current price of $1.71, which is an upside potential of 17%.
5. Arcadium Lithium plc (NYSE:ALTM)
Number of hedge fund investors’ holdings: 21
Arcadium Lithium plc (NYSE:ALTM), a result of the merger of Livent and Alkem – that took place in January 2024 – is a chemical company, engaged specifically in the production of lithium chemicals for EVs and portable electronics.
The merger was done to bring in synergy and cost savings, which could translate into an increased value of $60 to $80 million, and potentially, as a result of that, the share price of Arcadium Lithium plc (NYSE:ALTM) has shot up over 10% in the last couple of months. Furthermore, the analysts believe that the share is floating at somewhere around 7.2% below its intrinsic value, which speaks about the sweet upside potential of the stock.
Other analysts are setting the target price of the stock at $6.31, in relation to its current price of $3.22; what this would mean is that according to these analysts, the upside potential of the stock is 96%, which explains why the stock is here in our list of 10 Best Lithium and Battery Stocks to Buy Now. Lastly, 21 hedge funds have their holdings in the stock, which amount to $66.8 million.
