Energy & Critical Metals
3 Lithium Stocks That Will Skyrocket Before 2030
Lithium remains the key component in electric vehicle batteries and demand is exploding as a growing number of automakers move away from gasoline-powered…
Lithium remains the key component in electric vehicle batteries and demand is exploding as a growing number of automakers move away from gasoline-powered vehicles. However, after a two-year rally that saw lithium prices peak at $85,000, the market has crashed lower with lithium now selling for about $30,000. The price drop has been accelerated by a slowdown in China’s domestic economy. This has weighed on the stocks of lithium producers and developers of electric vehicle batteries. However, lithium stocks are a long-term investment.
The transition to battery-powered vehicles is not going to reverse, and demand for EVs is only going to grow in coming years. Lithium stocks can be expected to grow leaps and bounds. Even with this year’s price correction, many lithium stocks have still managed to post gains, demonstrating that they are resilient. Here are three lithium stocks that will skyrocket before 2030.
Albemarle (ALB)
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Albemarle (NYSE:ALB) remains the biggest provider of lithium for electric vehicle batteries in the world. If there is one lithium stock to own, Albemarle is it. After a bumpy time in 2022, Albemarle’s stock has rebounded this year. Since January, ALB stock is up 14%. Throughout the past five years, the share price has risen 155%. Even with the year to date gains, Albemarle stock looks affordable right now.
In May, Albemarle reported stronger-than-expected earnings but lowered its forward guidance, citing a slump in global prices for lithium. The company’s first quarter revenue increased 129% year over year, and its earnings per share (EPS) skyrocketed 334% higher from a year ago. Albemarle says it now expects revenues of $9.8 billion to $11.5 billion, and EPS $20.75 to $25.75 for all of 2023. While the lowered guidance is a bit disappointing, it doesn’t appear to have slowed momentum in ALB stock.
QuantumScape (QS)
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With little fanfare, QuantumScape (NASDAQ:QS) stock has increased 88% so far in 2023. This matches the gains seen in many mega-cap tech stocks. The company develops solid state lithium batteries for electric vehicles. It has come roaring back this year after getting clobbered during the market downturn of 2022. However, even with the big run throughout the past six months, QS stock is currently trading nearly 30% below its 52-week high. This means there is still an opportunity for investors to buy QuantumScape before the stock tests new highs.
QS stock got a big boost in June after Toyota Motor (NYSE:TM), the world’s biggest automaker, announced that it has achieved a technological breakthrough regarding the solid state lithium batteries that QuantumScape is developing. Toyota said that it hopes to be mass producing solid state lithium batteries for its electric vehicles by 2027. Toyota manufactures nearly 10 million autos each year. Until now, many analysts were skeptical of the technology related to solid state lithium batteries, and the ability to mass produce them.
It’s worth noting that Quantumscape has a number of notable investors, including Microsoft (NASDAQ:MSFT) co-founder Bill Gates and German automotive giant Volkswagen (OTCMKTS:VWAGY).
Lithium Americas (LAC)
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Shares of Lithium Americas (NYSE:LAC) are up 18% on the year and have gained 306% through five years. The company is focused on developing lithium mine projects in Argentina and Nevada, and is a growing player when it comes to supplying the lithium needed in electric vehicle batteries. The Canadian-based company has signed an agreement with General Motors (NYSE:GM) that will see it supply the automotive giant with raw lithium from its extraction projects.
Currently, Lithium Americas is focused on getting its production sites in Argentina and Nevada running at full tilt. The company is not yet generating much revenue and it remains unprofitable. However, the company and many analysts see a big opportunity ahead as demand for lithium batteries skyrockets with the global switch to electric vehicles. Lithium Americas says that its goal is to become a low-cost lithium producer to the global automotive industry. Right now, LAC stock looks like a bargain.
On the date of publication, Joel Baglole held long positions in MSFT and GM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
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