After a tough 2025, the global lithium market is gearing up for a new growth cycle. Prices fell about 90% by mid-year from their 2022 peak levels as electric vehicle (EV) demand slowed and supply built up, but 2026 looks very different.

EVs will still drive demand, but new sources are joining the mix. Strong growth in solar power installations across Europe, the United States and the Asia-Pacific region is boosting the use of battery energy storage systems (BESS), which rely on lithium to store electricity from renewable energy.

Artificial intelligence is also creating a new need for lithium. Massive AI data centers use as much electricity as small cities, and many are now adding lithium-ion batteries on-site to handle peak energy use and reduce pressure on local grids. Autonomous machines and humanoid robots could become another steady source of lithium demand over the next decade.

Governments are taking notice, too. Many now treat lithium as strategic, like energy grids or defense equipment. This means governments may support production and investments, adding stability to the market.

Per Fortune Business Insights, the global lithium market is expected to expand from $13.9 billion in 2024 to $55.5 billion by 2032, implying a CAGR of nearly 19%.

While lithium prices have been under pressure, sentiment is turning. Lithium carbonate prices in China have rallied more than 20% so far this month. Major producer Ganfeng Lithium expects global lithium demand to grow 30-40% in 2026 and has flagged high price targets of 150,000-200,000 RMB/ton as the market moves back toward balance.

Against this backdrop, a few lithium stocks — Rio Tinto plc (RIO Quick QuoteRIO - Free Report) , Lithium Americas Corp. (LAC Quick QuoteLAC - Free Report) , Albemarle Corporation (ALB Quick QuoteALB - Free Report) and Sociedad Quimica y Minera de Chile S.A. (SQM Quick QuoteSQM - Free Report) — are worth keeping on your watchlist.

Rio Tinto

Rio Tinto is making a serious push into lithium, aiming to become one of the world’s major producers. Earlier this year, the company completed its $6.7 billion acquisition of Arcadium Lithium, giving it access to one of the largest lithium resource bases globally. With Arcadium’s high-quality assets and broad product portfolio, Rio Tinto plans to grow capacity at its Tier 1 lithium operations to more than 200,000 tons of lithium carbonate equivalent per year by 2028.

Rio Tinto is also expanding its lithium footprint in South America. It acquired the Rincon project in Argentina in 2022 and made a $2.5 billion investment in the project in 2024. Rincon is expected to produce up to 60,000 tons of battery-grade lithium carbonate annually, with first production targeted for 2028 and a gradual ramp-up to full capacity.

In Chile, Rio Tinto has formed joint ventures with Codelco and ENAMI this year to develop high-grade lithium projects, strengthening its long-term supply pipeline.

For investors, Rio Tinto offers diversified exposure to lithium alongside its established global mining business. The stock sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for RIO’s next year EPS implies a year-over-year uptick of 11%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lithium Americas

Lithium Americas is making a bold play on the U.S. lithium market with its Thacker Pass project in Nevada, home to the largest lithium resource in the country. This project plays a critical role in securing domestic lithium supply. Thacker Pass is expected to produce up to 40,000 tons of lithium carbonate per year, enough for roughly 800,000 electric vehicles. If fully realized, this output could push the United States to the world’s second-largest lithium producer. Phase 1 of the project is on track, with mechanical construction of the processing plant expected to finish by late 2027.

The project has also attracted strong government backing. In October, the U.S. Department of Energy (“DOE”) acquired a 5% stake in both Lithium Americas and the Thacker Pass joint venture. Lithium Americas also drew the first $435 million from a larger $2.23 billion DOE loan, fueling construction and securing funding for the next stages.

For investors looking at the lithium rebound, LAC stands out as a key domestic play. Its combination of scale, government support and a clear production roadmap positions it well to benefit from rising lithium demand in the coming years.

LAC carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for LAC’s next year’s bottom line suggests a year-over-year improvement of 42%.

Albermarle

Albemarle is one of the world’s top lithium producers, well-positioned to benefit from long-term growth in battery-grade lithium. The company is actively boosting its global lithium conversion capacity through strategic projects, focusing on high-return investments that improve productivity and efficiency. Production milestones are supporting growth. In Chile, the Salar yield improvement project has reached a 50% operating rate, while ramp-up at the Meishan lithium conversion facility in China is ahead of schedule. Record output from integrated conversion plants contributed to higher sales volumes in Albemarle’s Energy Storage unit in the third quarter of 2025.

Albemarle is also streamlining operations, cutting costs and optimizing its conversion network to maintain a strong competitive edge. In 2025, these initiatives are expected to deliver around $450 million in cost and productivity gains, exceeding the initial target of $300-400 million.

With robust customer demand, expanded capacity and efficiency improvements, ALB is positioned to capture rising lithium demand globally. Its scale, diversified operations and focus on cost management make it a key player for investors looking to ride on the lithium rebound in 2026.

ALB carries a Zacks Rank #3. The Zacks Consensus Estimate for ALB’s 2026 EPS implies a year-over-year jump of 217%.

Sociedad Quimica

Sociedad Química is one of the noted producers of lithium, supplying battery and energy storage markets worldwide. Its scale and global footprint make it a key player as lithium demand rebounds.

SQM has built a highly diversified lithium platform across Chile, Australia and China. In Chile, the company is expanding operations at the Salar de Atacama, targeting lithium carbonate production of 240,000 metric tons by 2026. It is also ramping up lithium hydroxide capacity to 100,000 metric tons by the end of 2025.

In Australia, SQM is advancing the Mt. Holland project, a 50,000-metric-ton lithium hydroxide operation developed through a joint venture, while pursuing additional exploration projects. In China, the company operates a lithium hydroxide refinery and tolling facility with 40,000 metric tons of capacity, strengthening its downstream reach and global supply chain.

SQM expects long-term lithium demand to outpace supply and has already completed major capacity upgrades. With these improvements in place, the company believes it can grow market share, especially in supplying lithium for EV batteries.

For investors, SQM offers scale, diversification and strong leverage to a lithium market recovery. The stock carries a Zacks Rank #3. The Zacks Consensus Estimate for SQM’s 2026 EPS indicates a year-over-year surge of 117%.