We recently published a list of 10 Best Mineral Stocks to Buy Right Now. In this article, we are going to take a look at where Alcoa Corporation (NYSE:AA) stands against other best mineral stocks to buy right now.
At the heart of industrial growth lies the global mineral market, as there is a strong demand for essential metals in technology, clean energy, and infrastructure. The global mineral market is projected to grow from $2,260 billion in 2024 to $2,402 billion in 2025, demonstrating a CAGR of 6.2%, according to The Business Research Company. Lithium, cobalt, and copper are leading the market with their essential roles in battery storage and electrification, while gold and silver, on the other hand, remain key assets for hedging against inflation and economic uncertainty.
The U.S. mineral market, which generated $106 billion worth of mineral production in 2024, is experiencing stable demand for industrial minerals such as crushed stone, sand, and cement, according to the U.S. Geological Survey. These industrial minerals accounted for 68% of the total production of minerals in the U.S. in 2024, while crushed stone accounted for 24% of the total production, indicating a high demand for the category. Recycling activity was also strong, with $48 billion worth of metals and minerals recycled, signaling an increasing focus on sustainability.
On the other hand, rising investor and industrial demand have pushed gold and silver prices to record highs in 2024, a year that marked a 9% increase in the United States gold production, according to the USGS.Gov. Gold prices have risen by 19.7% over the past six months, reaching $2,888.3 on February 6, 2025. Moreover, silver prices have increased by 25% in 2024 due to an increased demand for solar panels and electronics. Furthermore, continued central bank purchases and inflationary concerns mean gold and silver prices will be on an upward trend in 2025 as well.
Lithium experienced a challenging 2024, as its prices fell by 22% in 2024 due to oversupply and weakened demand, as discussed in our recent article. As production cuts are made, and the market stabilizes, analysts project lithium’s surplus decreasing from 84,000 metric tons in 2024 to 33,000 metric tons in 2025. Nevertheless, the lithium market’s long-term growth prospects are still bright and clear with analysts projecting it to grow and reach $134.02 billion by 2032 at a CAGR of 22.1%.
Similarly, cobalt, another key battery raw material, is suffering from decreasing prices due to oversupply in the market, especially from China. However, its long-term prospects are strong as the global cobalt market is projected to grow from $10.8 billion in 2023 to $24.9 billion by 2030. This potential growth is tied to increasing demand for energy storage solutions and tighter supply chain regulations.
Another key component of the mineral market is copper, which is a highly sought-after metal in the renewable energy sector. The metal’s demand is attributed to rising adoption of renewables across the globe. In the U.S., the imposition of tariffs on Chinese imports could affect copper prices in the U.S., and could also increase investment in the exploration sector.
Thus, 2025 is expected to be an eventful year for the copper market as well as the mining sector overall, according to analysts. China controls over 90% of global rare earth metals, putting the U.S. in a vulnerable state, especially as China imposes export controls on 25 metal products. Instead of relying on China, the U.S. is turning toward alternative sources like Ukraine, which has access to 22 out of 50 critical minerals identified by the U.S., including graphite, lithium, and Uranium. In exchange for offering military support, the U.S. is seeking Ukraine’s mineral deposits to strengthen the U.S. mineral supply landscape. Thus, this deal has a tremendous potential to benefit local miners in the U.S. in accelerating the growth of critical minerals like graphite and lithium in the future.
As discussed, the minerals sector is at the heart of the global economy. Thus, we must shed light on the top players in the mineral sector.
Methodology
To compile the list of the 10 Best Mineral Stocks to Buy Right Now, we used the Yahoo Finance stock screener. Using the screener we compiled a list of mineral stocks sorted by market capitalization. Next, we ranked these stocks based on the number of hedge fund holders as per Insider Monkey’s third-quarter 2024 database.
Why do we care about what hedge funds do? 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).
Industrial workers carrying out the complex production process of alloy ingot at a factory.
Alcoa Corporation (NYSE:AA)
Number of Hedge Fund Holders: 40
Alcoa Corporation (NYSE:AA) operates across the U.S., Spain, Australia, Iceland, and other international markets. It produces bauxite, alumina, and aluminum products. The company serves the transportation, construction, packaging, and manufacturing industries through its two segments; Alumina and Aluminum.
For Q4 which ended on December 31, 2024, Alcoa Corporation (NYSE:AA) reported a 20% sequential increase in revenue, bringing it to $3.5 billion. Higher realized prices and increased shipments led to a 45% increase in the alumina segment’s third-party revenue. On the other hand, higher prices resulted in a 5% increase in the aluminum segment’s third-party revenue. As a result, net income rose from $90 million in Q3 2024 to $202 million in Q4, doubling earnings per share to $0.76. The improvement in pricing, shipments, and energy costs led to an increase of $222 million in adjusted EBITDA. Additionally, the company’s profitability improvement program led to $675 million in realized savings by the year-end.
The year 2024 marked record production at five of the company’s 11 smelters. Alcoa Corporation (NYSE:AA) was able to improve its relationship with key customers and suppliers while enhancing its value-added aluminum products. Furthermore, the company began 2025 on a strong note by completing the acquisition of Alumina Limited. This acquisition strengthens the company’s market position as a pure-play, upstream aluminum producer. The company’s financial health looks robust as it repaid $385 million in debt while maintaining its quarterly dividend.
Looking ahead, Alcoa Corporation (NYSE:AA) expects alumina production of somewhere between 9.5 million and 9.7 million tons in 2025, while recording shipments of 13.1 million to 13.3 million tons. Furthermore, targeted aluminum production stands at 2.3 million to 2.5 million tons, while shipments are projected between 2.6 million and 2.8 million tons. The company anticipates growth in 2025 driven by $700 million in capital expenditures, the majority of which is directed toward sustaining operations while $75 million is directed toward growth initiatives.
Although alumina production remains costly, Alcoa Corporation (NYSE:AA) believes in the effectiveness of its cost-saving initiatives, strategic plays, and operational efficiencies. Thus, analysts project a 15% price appreciation in the company’s stock over the next year, attributing it to aluminum price recovery and continued growth of the company.
Overall, AA ranks 3rd on our list of best mineral stocks to buy right now. While we acknowledge the potential of AA, 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 AA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.