In this article, we will look at the 8 Most Profitable Lithium Stocks to Invest In.
The lithium market has proven to be a crucial driver as the world moves toward clean energy. Lithium is an essential component for rechargeable batteries, powering electric vehicles (EVs), renewable energy storage systems, and electronics. Due to technological improvements in batteries and a commitment to carbon reduction, demand for lithium has escalated over the last decade. Fortune Business Insights valued the global lithium market at $22.19 billion in 2023, which is projected to reach $134.02 billion by 2032 at a CAGR of 22.1%. Despite this promising long-term scope, the lithium industry has faced significant volatility due to supply and demand imbalance and price fluctuations.
Reuters reported that, despite strong demand, lithium prices dropped 86% in the last two years from their peak in November 2022, primarily due to global oversupply that forced many mining operations to pause. Furthermore, the restart of a Chinese lithium carbonate refinery after a five-month pause could further weaken the case for any price recovery in the near future. As a result of this resumption, the oversupply issue could get worse and therefore, shares of big lithium companies in Asia and Australia have seen a decline.
However, analysts predict market stabilization by 2025 as supply and demand rebalance. With China leading the EV market and implementing vigorous policies, excess supply should be absorbed, potentially reversing price drops in the past two years. In addition, EV battery demand continues to grow, with global consumption reaching over 750 GWh in 2023, 40% higher than in 2022. The IEA posted that the U.S. and European EV markets had the fastest growth, each exceeding 40% year-over-year. As transportation electrification accelerates, so does the demand for lithium, establishing its crucial role in the battery metals industry. However, the industry faces production and sustainability challenges even as lithium demand surges. According to McKinsey & Company, battery producers struggle to secure raw materials, scale production, and meet sustainability targets, making supply chain resilience critical.
Meanwhile, lithium extraction raises environmental concerns, including water depletion and toxic waste, drawing increased attention from environmentalists and regulators. Companies are exploring technologies like Direct Lithium Extraction (DLE), offering better recovery rates and reduced environmental impact. Simultaneously, alternative battery chemistries like lithium iron phosphate (LFP) and sodium-ion batteries could diversify the market. However, these alternatives are still in early development and are not likely to replace lithium metal in the near future.
Looking forward, the lithium industry is poised to undergo a structural change. After years of oversupply, Fastmarkets projects a tighter market in 2025. By 2026, the market might face a deficit, with oversupply dropping from 154,000 metric tons in 2024 to just 10,000 metric tons, driven by continued EV adoption and battery storage demand. Through these short-term uncertainties, long-term fundamentals remain strong as analysts predict sustained lithium consumption growth and increased investments in mining and refining. With companies navigating these hurdles, lithium’s role remains essential to the global energy transition and investors seeking green energy resources.
With this, let’s now dive into the 8 Most Profitable Lithium Stocks to Invest In.
A miner hard at work, extracting raw lithium from a mineral resource.
Methodology
To compile our list of the Most Profitable Lithium Stocks to Invest In, we first identified companies with significant operations in the lithium sector. We then ranked these companies based on their latest trailing twelve-month net income, while ensuring that they had a strong market capitalization at the time of writing. Additionally, we analyzed hedge fund sentiment for these stocks, as high hedge fund interest often signals strong financial positioning and growth potential. The hedge fund data was derived from Insider Monkey’s database of Q4 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
8. Sociedad Química y Minera de Chile S.A. (NYSE:SQM)
Last Year’s Net Income: -$404.36 million
Number of Hedge Fund Holders: 10
Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is a global supplier of lithium, iodine, and specialty plant nutrients, playing a critical role in the battery supply chain. It is the world’s biggest lithium producer, with its main production facilities located in the Atacama Desert in the Tarapacá and Antofagasta regions.
For Q1 2024, Sociedad Química y Minera de Chile S.A. (NYSE:SQM) reported revenues of around $1.1 billion. However, its bottom line took a serious hit from a one-time $1.1 billion charge due to the lithium mining tax in Chile. Despite this, the company showed robust volume growth across all segments, with lithium sales jumping nearly 30% year-over-year. In Chile, SQM boosted its lithium carbonate production capacity to 210,000 metric tons. These steps paved the way for a profit rebound in the second half of the year.
By Q4 ended December 31, 2024, SQM had bounced back, posting record sales of over 58,000 metric tons of lithium carbonate equivalent. This helped push annual lithium sales to about 205,000 metric tons. Full-year revenue topped $4.5 billion, with gross profits of $1.3 billion, displaying a strong recovery for the company. While lithium prices fell throughout 2024, they stabilized in the fourth quarter resulting in improved margins for the company.
Looking ahead, Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is setting itself up for long-term success through its strategic lithium expansion in Chile and Australia. Lithium demand is also expected to grow by 17% in 2025, indicating strong future demand. Moreover, the company plans to invest $750 million in lithium expansion and another $350 million in caliche operations to keep growth on track.
Moreover, the stock has increased 24.26% year-to-date, reflecting growing investor confidence. As lithium demand rises, SQM’s strong production capacity and ongoing investments make it a smart pick for investors eyeing profitable lithium stocks.
7. Ultralife Corporation (NASDAQ:ULBI)
Last Year’s Net Income: $8.99 million
Number of Hedge Fund Holders: 9
Ultralife Corporation (NASDAQ:ULBI) creates and produces top-tier power solutions, mainly lithium-based batteries, for commercial, industrial, and defense applications. The company runs two key units: Battery & Energy Products and Communications Systems with a growing focus on lithium battery solutions.
For the third quarter ended September 30, 2024, Ultralife Corporation (NASDAQ:ULBI) posted $35.7 million in sales, down from $39.5 million in Q3 2023. The Battery & Energy unit grew 1.9% year-over-year, driven by a 28.9% increase in sales to defense clients, showing higher demand for lithium power solutions. However, this growth was offset by declines in the medical battery (-12.4%) and industrial (-10.9%) markets. The company’s $78 million backlog spans government and business sectors, giving it a stable sales pipeline.
The Communications Systems unit saw a 58% drop in revenue, primarily due to delayed military orders. Despite this setback, Ultralife Corporation (NASDAQ:ULBI) continues to implement cost-cutting initiatives, supply chain improvements, and lean production to boost future profits.
On November 1, 2024, the company acquired Electrochem Solutions, Inc. for $50 million. Electrochem Solutions provides lithium metal and ultracapacitor cells for energy, military, and industrial uses. Electrochem made $34 million over the past year, and Ultralife sees this deal as a way to grow its lithium battery business, boost production, and generate new revenue streams. CEO Mike Manna stressed the deal’s benefits, including improved scale, cross-selling, and cost savings.
With its growing role in lithium-powered technology and ongoing expansion in key markets, Ultralife Corporation (NASDAQ:ULBI) is well-positioned to capitalize on increasing demand in the lithium battery industry. This makes it one of the most profitable lithium stocks for investors.
6. Energizer Holdings, Inc. (NYSE:ENR)
Last Year’s Net Income: $58.50 million
Number of Hedge Fund Holders: 26
Energizer Holdings, Inc. (NYSE:ENR) leads the global battery market, manufacturing lithium, alkaline, and specialty batteries under renowned brands like Energizer, Eveready, and Rayovac. It also sells auto care products such as protectants, air fresheners, and fuel additives through brands such as Armor All and STP.
For Q1 2025, ended December 31, 2024, Energizer Holdings, Inc. (NYSE:ENR) reported that its organic net sales grew 3.8%, with battery sales up by 4% and auto care rising 2%. The adjusted gross margin grew by 50 basis points to 40% due to cost-efficiency measures under Project Momentum, delivering $20 million that quarter. This led to a 14% growth in adjusted earnings per share, strengthening the company’s operational efficiency.
Furthermore, the company reduced its debt by $25 million, marking ten straight quarters of deleveraging. Energizer Holdings, Inc. (NYSE:ENR) remains focused on wider distribution, market growth, and digital transformation to drive steady growth this year. Meanwhile, management raised its yearly organic sales growth outlook to 2-3%, reflecting confidence in continued demand and strategic investments.
Energizer Holdings, Inc. (NYSE:ENR) also declared a $0.30 per share quarterly dividend, payable on March 13, 2025, showing the company’s commitment to shareholder returns. Although currency headwinds and increased promotions may create hurdles, Energizer’s cost-cutting efforts, international expansion, and new products should help balance these pressures. With a strong fiscal 2025 start and ongoing investment in long-term growth, the stock remains a well-positioned and profitable lithium stock.
5. Enphase Energy, Inc. (NASDAQ:ENPH)
Last Year’s Net Income: $102.66 million
Number of Hedge Fund Holders: 39
Enphase Energy, Inc. (NASDAQ:ENPH) produces home energy solutions, focusing on microinverters, solar batteries, and energy management software. The company is a key player in the solar industry and has been growing its product line globally, making it one of the most profitable lithium stocks.
In the fourth quarter of 2024, Enphase Energy, Inc. (NASDAQ:ENPH) reported $382.7 million in revenue. The company shipped about two million microinverters and 152 megawatt-hours of batteries. Enphase’s gross margin stayed strong at 53%, and it generated $159 million in free cash flow. Meanwhile, U.S. sales grew 6% from the previous quarter, aided by an 11% increase in microinverter sales. However, due to unsteady market trends, the company faced a 25% drop in European sales. Nevertheless, Enphase is focusing on expansion with the launch of new products like the IQ Battery 5P and IQ8 Microinverters, which should boost growth in 2025.
On January 17, 2025, Enphase Energy, Inc. (NASDAQ:ENPH) integrated its Enphase Energy System with Octopus Energy’s smart tariffs in the U.K. This allowed customers to optimize energy use by charging batteries during cheaper hours and selling excess energy at higher rates. Octopus Energy serves over nine million homes while providing real-time management for Enphase customers through its Kraken platform. This move adds value to Enphase’s solar energy systems and strengthens its position in the U.K.
Enphase Energy, Inc. (NASDAQ:ENPH) is also expanding in India, where power outages are common. On December 17, 2024, the company started shipping its IQ Battery 5P to Indian customers. This powerful home battery offers a scalable capacity of up to 40 kWh and uses advanced lithium iron phosphate chemistry, ensuring safe and efficient operation. Enphase has teamed up with several installers to support deployment and meet the growing need for reliable energy solutions in India. Enphase Energy, Inc. (NASDAQ:ENPH) is enhancing its position in the market through these partnerships and global rollouts.
4. EnerSys (NYSE:ENS)
Last Year’s Net Income: $328.10 million
Number of Hedge Fund Holders: 30
EnerSys (NYSE:ENS) supplies stored energy solutions globally. The company serves diverse markets, including telecom, defense, transportation, and renewable energy. It has four segments: Energy Systems, Motive Power, Specialty, and New Ventures which offer both lithium-ion and lead-acid batteries, plus storage solutions and fast-charging systems. With this distinct presence in the industry, EnerSys stands out as one of the most profitable lithium stocks.
For Q3 2025, ended December 29, 2024, EnerSys (NYSE:ENS) reported revenue of $906 million. This marked a 5% rise year-over-year, fueled by the growth of Energy Systems and the acquisition of Bren-Tronics. Energy Systems grew 4% as the U.S. saw a recovery in demand in communications and data centers, whereas Motive Power generated a 1% increase in revenue despite disruptions in Europe. Specialty revenue leaped 17% due to high demand in the aerospace and defense industries. Moreover, EnerSys generated $57 million in free cash flow, and an expected $135 million tax refund is set for March 2025.
On January 17, 2025, EnerSys (NYSE:ENS) secured a $199 million award from the U.S. Department of Energy. The funding will be used to build a 500,000-square-foot lithium-ion cell factory in Greenville, South Carolina. The plant will produce U.S.-sourced lithium-ion batteries for commercial, industrial, and defense uses, including for the U.S. Department of Defense. Construction is expected to start in 2025, while production should begin by 2028. This step strengthens EnerSys’s position not only in the U.S. energy supply chain but also in the defense sector.
With critical government funding, growth in key sectors, and ongoing innovation, EnerSys is set to profit from the rising demand for lithium energy systems. Thus, EnerSys (NYSE:ENS) remains a profitable lithium stock for investors.
3. Panasonic Holdings Corporation (OTC:PCRFF)
Last Year’s Net Income: $2.12 billion
Number of Hedge Fund Holders: N/A
Panasonic Holdings Corporation (OTC:PCRFF) has strengthened its position in the lithium battery sector through strategic expansion and innovation. The company runs several divisions, with its Energy unit being vital for EVs and the energy storage industry. With a focus on cutting-edge battery technology, Panasonic aims to boost efficiency and cut costs in the lithium market.
For the nine months ended December 31, 2024, Panasonic Holdings Corporation (OTC:PCRFF) posted total sales of $42.9 billion, up 2% from the previous year. However, its Energy unit saw sales drop 9% to $4.3 billion due to lower output at its Japanese plant and price cuts. Despite this, the Energy unit’s profit rose to $646 million, driven by increased sales of storage systems for data centers and higher profits at its North American plant.
Panasonic Holdings Corporation (OTC:PCRFF) completed plans to mass-produce its new 4680 lithium-ion battery cells, which hold five times more power than standard 2170 cells. The company reinforced its leadership in battery innovation by revamping its Wakayama plant in Japan as the global hub for 4680 production. These new cells should give EVs a longer driving range while lowering costs, making Panasonic a key supplier in the EV battery sector.
Beyond technological advancements, Panasonic Holdings Corporation (OTC:PCRFF) is expanding its partnerships to strengthen its lithium battery production network. The company entered into agreements with Subaru and Mazda to set up new lithium-ion battery plants. Additionally, it started supplying batteries for heavy-duty electric trucks in the U.S. through Hexagon Purus ASA and Hino Motors Sales USA. With ongoing investments in next-generation battery solutions and global production, Panasonic remains a top pick among the most profitable lithium stocks.
2. Tesla, Inc. (NASDAQ:TSLA)
Last Year’s Net Income: $7.13 billion
Number of Hedge Fund Holders: 126
Tesla, Inc. (NASDAQ:TSLA) is constantly expanding its energy storage and battery operations, using newly developed lithium refining initiatives to boost its supply chain. The company aims to expand manufacturing capacity while improving energy solutions and self-driving technology.
In Q4 ended December 31, 2024, Tesla, Inc. (NASDAQ:TSLA) reported outstanding success in vehicle deliveries and energy storage deployments. Moreover, the company cut automotive inventory to its lowest level in two years. Additionally, it brought vehicle costs below $35,000. Yet margins fell due to lower average selling prices and preparations for the shift to the new Model Y. Although energy storage did reach record highs thanks to the demand for Megapack and Powerwall products, growth of at least 50% is expected in 2025.
Furthermore, Tesla, Inc. (NASDAQ:TSLA) has marked a key step in securing battery materials through its $1 billion lithium refining plant in Texas. The facility has begun processing raw materials and should start lithium hydroxide production in 2025. At full capacity, it will support 50 GWh of yearly battery production, enough for about 500,000 cars. This move reduces dependence on foreign suppliers due to domestically sourced materials, simultaneously giving Tesla better control over production costs.
With its record deliveries, battery advances, and focus on autonomous driving, Tesla, Inc. (NASDAQ:TSLA) is strengthening its position in the EV and energy markets. Investments in lithium refining and AI-driven transportation should drive growth and efficiency, making Tesla one of the top profitable lithium stocks.
1. Rio Tinto Group (NYSE:RIO)
Last Year’s Net Income: $11.55 billion
Number of Hedge Fund Holders: 39
Rio Tinto Group (NYSE:RIO) is a top global mining company focused on the exploration and production of minerals, crucial for industrial and energy applications. The company works across the iron ore, aluminum, copper, and minerals sectors, with a growing focus on lithium to support the energy transition. Rio Tinto has recently made key moves to grow its lithium portfolio and boost the integration of renewable energy.
To strengthen its lithium market stance, Rio Tinto Group (NYSE:RIO) acquired Arcadium Lithium for $6.7 billion in March 2025. This deal, which adds the Rincon lithium project, positions Rio Tinto Lithium as one of the top lithium producers worldwide. The company now aims to produce over 200,000 tons of lithium carbonate equivalent (LCE) annually by 2028. By using Arcadium’s prime assets coupled with Rio Tinto’s financial strength, the company aims for higher EBITDA and better cash flow in the future.
Rio Tinto Group (NYSE:RIO) posted robust financial results despite shifting market trends. Its underlying EBITDA fell just 2% to $23.3 billion, helped by stronger performance in aluminum and copper, even as iron ore prices dropped 11%. Meanwhile, operating cash flow stayed strong, up 3% with a 67% EBITDA cash conversion rate. The company spent $9.5 billion in capital, with net debt at $5.5 billion, while maintaining its 60% payout ratio for regular dividends, giving $6.5 billion to investors.
Rio Tinto Group (NYSE:RIO) is setting itself up for future growth by focusing on lithium and clean energy. The company is working to boost profits while supporting global climate initiatives by growing its key mineral assets and forming green energy partnerships.
Overall, Rio Tinto Group (NYSE:RIO) ranks first on our list of the Most Profitable Lithium Stocks to Invest In. While we acknowledge the potential of RIO, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RIO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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