In this article, we discuss the 12 best lithium and battery stocks to buy according to financial media.
The global demand for batteries, and lithium batteries in particular, has been increasing over the past few years as the transition to electric vehicles and the increased reliance on energy storage pick up pace. According to a report by consulting firm McKinsey, the battery world will experience explosive growth in the next decade, growing to nearly 4.7 TWh in size by the end of 2030, reaching a value in excess of $400 billion and exhibiting an annual growth rate of around 30% beginning 2022, up from the previously predicted 25%.
This growth is likely to benefit large battery and lithium firms like Tesla, Inc. (NASDAQ:TSLA), Albemarle Corporation (NYSE:ALB), and Livent Corporation (NYSE:LTHM). Even though these firms are set to experience a market boom for batteries, investors who are eager to invest in them should also monitor some of the concerns regarding battery futures in the near term. For example, ensuring steady supplies of raw materials and equipment to ramp up manufacturing will be a key divider of the best from the rest.
The growth drivers for battery and lithium firms include regulatory shift towards greener technologies, greater consumer adoption rates for battery tech, and new battery-powered products by energy, electronics, and auto firms. Some examples of these drivers include the US Inflation Reduction Act, the 2035 ban of internal combustion engine vehicles in the EU, adoption of hybrid vehicles policies in India – a major developing hub – and expert predictions that 90% of total passenger car sales will involve EVs in selected countries by 2030.
China, where the demand for EVs is among the highest in the world, could account for nearly 45% of demand for lithium batteries by 2025, per McKinsey. Although this number will fall down to 40% by 2030, Chinese firms in the battery and lithium space are likely to benefit from this. Even US-based firms are adopting their EV growth strategies for Chinese markets. Paul Graves, the CEO of Livent Corporation (NYSE:LTHM), said during the third quarter call that EV sales in China were reaching record highs.
“On the demand side, we can see that customer buying activity for lithium in Q3 was weaker than what end market demand indicators would imply. For example, NEV battery installations in China were up 24% year over year for the third quarter and were 32% higher through the first three quarters of 2023. EV sales in China continue to reach new records during the third quarter. Globally, EV sales grew 25% in the month of September and are up 37% year to date, but it’s fair to say that in the third quarter we did not see demand for lithium at levels that are consistent with these numbers.
On the supply side, the third quarter typically has higher seasonal production in China, but the amount of new supply that actually came to market was not meaningfully higher than most analysts forecasted. We continue to see production expansion delays globally and keep in mind that the increased sources of supply that most observers typically point to, namely African spodumene or Chinese lepidolite are much higher cost material on the global cost curve and certainly a higher cost than today’s indices are pointing to. In fact, we’ve already started to see reduced production from some of these higher costs and largely unintegrated operators. And as we’ve said in the past, the amount of lipidolite production that has come into the market is actually a symptom of insufficient supply from other sources.”
Our Methodology
To select stocks for this list, we scoured the top stock picks in the lithium and battery world as recommended by prominent financial websites. The top twelve consensus picks were then selected and ranked based on hedge fund sentiment. The analyst ratings of each stock are also discussed to provide readers with some context for their investment choices. The hedge fund sentiment around each stock was calculated using the data of around 900 hedge funds tracked by Insider Monkey in the third quarter of 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
A close-up of a lithium-ion battery surrounded by a network of silicon nanowires.
Best Lithium and Battery Stocks to Buy According to Financial Media
12. CBAK Energy Technology, Inc. (NASDAQ:CBAT)
Number of Hedge Fund Holders: 1
CBAK Energy Technology, Inc. (NASDAQ:CBAT) together with its subsidiaries, develops, manufactures, and sells lithium batteries. On November 9, CBAK Energy Technology, Inc. (NASDAQ:CBAT) posted earnings for the third quarter of 2023, reporting earnings per share of $0.07, beating market estimates by $0.10.
At the end of the third quarter of 2023, 1 hedge fund in the database of Insider Monkey held stakes worth $118,000 in CBAK Energy Technology, Inc. (NASDAQ:CBAT), the same as in the preceding quarter worth $55,000.
Just like Tesla, Inc. (NASDAQ:TSLA), Albemarle Corporation (NYSE:ALB), and Livent Corporation (NYSE:LTHM), CBAK Energy Technology, Inc. (NASDAQ:CBAT) is one of the best lithium and battery stocks to buy according to financial media.
11. Lithium Americas Corp. (NYSE:LAC)
Number of Hedge Fund Holders: 9
Lithium Americas Corp. (NYSE:LAC) operates as a resource company in the United States and Argentina. On December 11, investment advisory JPMorgan initiated coverage of Lithium Americas Corp. (NYSE:LAC) stock with a Neutral rating and a price target of $7.
Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Point72 Asset Management is a leading shareholder in Lithium Americas Corp. (NYSE:LAC) with 1 million shares worth more than $18 million.
10. Piedmont Lithium Inc. (NASDAQ:PLL)
Number of Hedge Fund Holders: 10
Piedmont Lithium Inc. (NASDAQ:PLL) an exploration stage company that engages in the exploration and development of resource projects in the US. On November 9, investment advisory B Riley maintained a Buy rating on Piedmont Lithium Inc. (NASDAQ:PLL) stock and lowered the price target to $53 from $57.
At the end of the third quarter of 2023, 10 hedge funds in the database of Insider Monkey held stakes worth $43 million in Piedmont Lithium Inc. (NASDAQ:PLL), compared to 14 the preceding quarter worth $66 million.
9. Microvast Holdings, Inc. (NASDAQ:MVST)
Number of Hedge Fund Holders: 13
Microvast Holdings, Inc. (NASDAQ:MVST) provides battery technologies for electric vehicles and energy storage solutions. On November 29, investment advisory Cantor Fitzgerald initiated coverage of Microvast Holdings, Inc. (NASDAQ:MVST) stock with an Overweight rating and a price target of $8.
At the end of the third quarter of 2023, 13 hedge funds in the database of Insider Monkey held stakes worth $24 million in Microvast Holdings, Inc. (NASDAQ:MVST), the same as in the previous quarter worth $18 million.
8. Sigma Lithium Corporation (NASDAQ:SGML)
Number of Hedge Fund Holders: 15
Sigma Lithium Corporation (NASDAQ:SGML) engages in the exploration and development of lithium deposits. On December 6, investment advisory Bank of America initiated coverage of Sigma Lithium Corporation (NASDAQ:SGML) stock with a Buy rating and a price target of $37.
At the end of the third quarter of 2023, 15 hedge funds in the database of Insider Monkey held stakes worth $102 million in Sigma Lithium Corporation (NASDAQ:SGML), compared to 12 in the preceding quarter worth $72 million.
7. FREYR Battery (NYSE:FREY)
Number of Hedge Fund Holders: 16
FREYR Battery (NYSE:FREY) engages in the production and sale of battery cells for energy storage systems, electric mobility, marine, and aviation applications. On November 9, FREYR Battery (NYSE:FREY) posted earnings for the third quarter of 2023, beating market estimates on earnings per share by $0.16.
At the end of the third quarter of 2023, 16 hedge funds in the database of Insider Monkey held stakes worth $96 million in FREYR Battery (NYSE:FREY), compared to 18 in the previous quarter worth $171 million.
6. ChargePoint Holdings, Inc. (NYSE:CHPT)
Number of Hedge Fund Holders: 16
ChargePoint Holdings, Inc. (NYSE:CHPT) provides electric vehicle (EV) charging networks and charging solutions. On December 8, investment advisory Citi maintained a Neutral rating on ChargePoint Holdings, Inc. (NYSE:CHPT) stock and lowered the price target to $2.4 from $8.2.
At the end of the third quarter of 2023, 16 hedge funds in the database of Insider Monkey held stakes worth $50 million in ChargePoint Holdings, Inc. (NYSE:CHPT), compared to 15 in the previous quarter worth $62 million.
Along with Tesla, Inc. (NASDAQ:TSLA), Albemarle Corporation (NYSE:ALB), and Livent Corporation (NYSE:LTHM), ChargePoint Holdings, Inc. (NYSE:CHPT) is one of the best lithium and battery stocks to buy according to financial media.
5. QuantumScape Corporation (NYSE:QS)
Number of Hedge Fund Holders: 20
QuantumScape Corporation (NYSE:QS) focuses on the development and commercialization of solid-state lithium-metal batteries for electric vehicles and other applications. On December 18, investment advisory Willaim Blair initiated coverage of QuantumScape Corporation (NYSE:QS) stock with a Market Perform rating.
At the end of the third quarter of 2023, 20 hedge funds in the database of Insider Monkey held stakes worth $83 million in QuantumScape Corporation (NYSE:QS), compared to 17 in the previous quarter worth $47 million.
4. Sociedad Quimica y Minera de Chile S.A. (NYSE:SQM)
Number of Hedge Fund Holders: 24
Sociedad Quimica y Minera de Chile S.A. (NYSE:SQM) produces and distributes specialty plant nutrients, iodine and derivatives, lithium and derivatives, potassium chloride and sulfate, industrial chemicals, and other products and services. On December 11, investment advisory JPMorgan maintained an Overweight rating on Sociedad Quimica y Minera de Chile S.A. (NYSE:SQM) stock and lowered the price target to $64 from $75.
At the end of the third quarter of 2023, 24 hedge funds in the database of Insider Monkey held stakes worth $286 million in Sociedad Quimica y Minera de Chile S.A. (NYSE:SQM), the same as in the preceding quarter worth $324 million.
3. Livent Corporation (NYSE:LTHM)
Number of Hedge Fund Holders: 24
Livent Corporation (NYSE:LTHM) manufactures and sells performance lithium compounds primarily used in lithium-based batteries, specialty polymers, and chemical synthesis applications. On November 29, investment advisory JPMorgan maintained a Neutral rating on Livent Corporation (NYSE:LTHM) stock and lowered the price target to $15 from $25.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Livent Corporation (NYSE:LTHM) with 82 million shares worth more than $180 million.
In its Q3 2023 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and Livent Corporation (NYSE:LTHM) was one of them. Here is what the fund said:
“Livent Corporation (NYSE:LTHM) is a pure-play, fully integrated producer of performance lithium compounds. The decline in lithium spot market prices, primarily in China, pressured shares. Despite this near-term headwind, the global lithium market remains tight in the long term. We believe Livent plays a critical role in the electric vehicle (EV) battery value-chain and is well-positioned for the overall growing global adoption of EVs. The company also remains on track to close its announced merger with an Australian-based peer by the end of the year. The combined company will benefit from enhanced operating flexibility and an increased global footprint.”
2. Albemarle Corporation (NYSE:ALB)
Number of Hedge Fund Holders: 37
Albemarle Corporation (NYSE:ALB) develops, manufactures, and markets engineered specialty chemicals worldwide. On December 12, investment advisory Bank of America upgraded Albemarle Corporation (NYSE:ALB) stock to Neutral from Underperform and lowered the price target to $149 from $154.
At the end of the third quarter of 2023, 37 hedge funds in the database of Insider Monkey held stakes worth $274 million in Albemarle Corporation (NYSE:ALB), compared to 41 the preceding quarter worth $436 million.
In its Q3 2023 investor letter, The London Company, an asset management firm, highlighted a few stocks and Albemarle Corporation (NYSE:ALB) was one of them. Here is what the fund said:
“Albemarle Corporation (NYSE:ALB) – ALB underperformed due to declining lithium spot prices in the quarter. We remain attracted to ALB, reflecting its low cost position in two consolidated industries (lithium & bromine). However, we recognize quarterly results can be volatile, driven by short-term supply-demand dynamics for the underlying commodities. It is important to note that ALB’s favorable position on the cost curve means the company can likely maintain healthy profitability even at trough prices.”
1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 81
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company. On December 18, investment advisory RBC Capital maintained an Outperform rating on Tesla, Inc. (NASDAQ:TSLA) stock and lowered the price target to $300 from $301.
At the end of the third quarter of 2023, 81 hedge funds in the database of Insider Monkey held stakes worth $5.8 billion in Tesla, Inc. (NASDAQ:TSLA), compared to 79 in the previous quarter worth $6.5 billion.
Here is what Baron Fund has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q2 2023 investor letter:
“Many factors contributed to the strong performance of our largest Disruptive Growth position, Tesla, Inc. (NASDAQ:TSLA), in the period. Investors’ concerns regarding Tesla in 2022 continue to dissipate, and the company’s business has continued to grow materially, although at below peak margins. Tesla’s deliveries in China are recovering. The company’s newest factory in Texas has ramped production and should contribute to improved domestic sales and margins. U.S. government policies have lowered the cost to own Tesla vehicles, while also reducing the company’s battery production expenses.
We continue to believe that Tesla is only scratching the surface of its potential. We regard announced partnerships between Tesla and its competitors in the quarter as important. In early June, Tesla agreed to provide Ford Motors access to Tesla’s electric vehicle (EV) charging technology and network. Other traditional and pure EV manufacturers, including General Motors, Rivian, and Volvo, quickly followed suit. We expect additional charging partnerships to ensue. In our view, these relationships validate Tesla’s charging technology and infrastructure as superior to other standards. Consolidation around a single technology should accelerate charging infrastructure deployment, diminish the risk of Tesla’s technology becoming obsolete, and lessen a key concern of hesitant EV purchasers. EV adoption is at a tipping point. And Tesla, with its approximately 60% domestic market share of EVs, should be the most important beneficiary of this shift…” (Click here to read the full text)
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Disclosure. None. 12 Best Lithium and Battery Stocks to Buy According to Financial Media is originally published on Insider Monkey.
