Albemarle Sits at the Center of Lithium's Next Cycle

Albemarle Corp. (NYSE: ALB) was a strong performer in 2025, climbing approximately 80%. As one of the world’s leading lithium miners and processors, Albemarle is an indirect play on the price of lithium. The company won’t report its fourth quarter 2025 earnings for another month, but several analysts have already weighed in with a bullish outlook for ALB stock.

• Robert Baird upgraded ALB stock from Neutral to Outperform and raised its price target to $210 from $113.
• Scotiabank upgraded the stock from Sector Perform to Sector Outperform and raised its price target to $200 from $85.
• Deutsche Bank upgraded Albemarle from a Hold to a Buy and confirmed its price target of $185.

The key is the price of lithium, which recently jumped above $15 per kilogram. After a sharp downturn in 2023 and 2024 due to oversupply, the lithium market has now normalized. However, demand continues to grow from areas such as grid-scale storage, AI-driven data center power systems, and electric vehicles.

That has many analysts forecasting a bullish supply-demand balance that historically supports higher prices. Some analysts believe lithium could reach $17 per kilogram in 2026. In this case, Albemarle stands to benefit.

Lithium Prices Rise as Analysts Revisit Albemarle’s 2026 Outlook

Lithium is a “theme metal,” but that shouldn’t be mistaken for a cyclical play. There is structural demand for lithium, unlike some metals needed in sectors like construction. Plus, lithium supply is being eaten up by world governments that are pushing domestic production and stockpiling.

Plus, there’s the “right sizing” of the investment in lithium, which sets up the market for future shortages.

The bottom line for investors is that, in 2026, lithium will be a core pillar of the metals cycle tied to electrification, energy security, and long-term growth, making it one of the most important trades for investors looking to profit from basic materials stocks.

Energy Storage Demand Puts Albemarle Back in Focus for 2026

In raising its price target for ALB stock, Baird cited the demand for stationary energy storage, which is still in the early stages. Albemarle is well-positioned for a tighter lithium supply chain.

But this is more than a lithium story. Baird also cited Albemarle’s catalyst products business as another area with a strong demand story in the battery market. Albemarle also has significant pricing power in its bromine segment.

ALB Stock Is Overvalued, But Selling May Not Be the Move

Momentum trading is tricky in the best of circumstances. However, there are several examples in the past two years–Palantir Technologies Inc. (NASDAQ: PLTR) and NVIDIA Corp. (NASDAQ: NVDA) come to mind–when investors would have done well to ride the hot hand.

That’s what investors will have to be willing to do if they’re investing in ALB stock. After its strong run in 2025, it’s trading over 23% above its consensus price target. But if analysts are correct, there could be between 20% and 30% more upside.

But it may require patience. Albemarle’s chart is flashing classic overbought signals.

For example, the 14‑day RSI is hovering around 80, and the MACD is firmly positive. Plus, the ALB stock price has gone almost parabolic since November, with only shallow dips, which naturally raises the odds of a shakeout or cooling period.

However, that doesn’t automatically make the stock a candidate for shorting or even as one to sell. Where the overbought thesis goes wrong is treating those readings as precise timing tools. In strong uptrends, RSI can live above 70, and MACD can stay stretched while price keeps grinding higher. Therefore, these signals could be confirming powerful upside momentum rather than a trend that has already rolled over.

Without bearish divergences, heavy‑volume reversals, or breaks of short‑term support, overbought is more a description of current strength than a sell signal. For traders already long, the setup argues for disciplined risk management rather than aggressive fading. Tightening stops, trimming into strength, or adding hedges respects how extended the move is while still acknowledging the prevailing uptrend.

Where Should You Invest $1,000 Right Now?

Before you make your next trade, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.

Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.

They believe these five stocks are the five best companies for investors to buy now...

See The Five Stocks Here

The article "Albemarle Sits at the Center of Lithium’s Next Cycle" first appeared on MarketBeat.