12 best battery stocks to invest in before they take off

In this piece, we’ll look at the 12 best battery stocks to invest in before they take off. If you want to skip our overview of the latest developments in the battery and electric vehicle industry, you can take a look at the 5 best battery stocks to invest in before they take off.

The global battery industry, ‘powered’ by lithium, will be significantly more important in 2024 than in 2014. This is due to the success of Tesla, Inc. (NASDAQ:TSLA) in successfully mass-producing electric vehicles. This has shown to investors that investing in clean energy stocks can yield beneficial results and that electric vehicles have the full potential of becoming a reality rather than something just in the realm of science fiction.

But just like on a smartphone or laptop, batteries also remain one of the weakest links of modern electric cars. Smartphones, even those from billion-dollar consumer technology giant Apple Inc. (NASDAQ:AAPL), see their batteries degrade over time, even if their other components, such as the display or processors, can continue to perform for years. Likewise, an electric car battery is made by Tesla or other electric vehicle companies such as Li Auto Inc. (NASDAQ:LI) not only one of the most vulnerable parts of a car, but also a part that could be in short supply if there are any fluctuations in the global lithium industry.

This of course means that the global battery industry is not only one of the most valuable in the world, but also that it has steady growth ahead of it if the world’s plans to phase out internal combustion vehicles come to fruition. Estimates show the global lithium battery industry to be worth $54 billion by 2023, but global macroeconomic challenges in the wake of the coronavirus pandemic have also shaken the sector. While battery stock investors previously had to keep a close eye on China to ensure their sector’s supply chain was functioning smoothly, Canada was the world’s leading battery supply chain as of February 2024, according to Bloomberg data. This is the first time in history that China has been displaced from the top spot, and it follows a growing global shift towards sustainable and ethical battery sourcing.

What does this mean for battery stocks? Well, this is good news for battery stocks traded on US exchanges in particular, as US automakers will be able to rely not only on Canada for their battery needs, but also on tax breaks under the Biden-Harris administration’s Inflation Reduction Act (IRA) . could also extend to batteries and materials sourced from Canada.

While Canada’s rising prominence in the global lithium battery supply chain is a tailwind for battery stocks, they also enter 2024 on shaky footing. Their main fast-growing market, namely electric vehicles, is struggling to operate in an era of high interest rates and inflation, so much so that in the fourth quarter of 2024, electric car king Tesla was ousted by Chinese conglomerate BYD Company Limited (OTC:BYDDF) . Tesla’s deliveries in the fourth quarter of 2023 amounted to 484,507 vehicles, while BYD was able to achieve 526,409 sales for its cheaper electric cars. The duo’s arrangement is a prime example of the cutthroat Chinese market, where Tesla and BYD have slashed prices and sacrificed margins to gain market share, even as their products earn fewer cents on the dollar.

This turmoil in the electric car industry is also present in the global lithium market. Lithium and battery stocks such as Lithium Americas Corp. (NYSE:LAC) and Albemarle Corporation (NYSE:ALB) are down 31% and 19.29% respectively, while lithium prices are down more than 70% due to the simultaneous effects of softer demand and rising supply. The declines in lithium and battery stocks come just as U.S. oil giant Exxon Mobil Corporation (NYSE: ​to become one of the world’s largest lithium suppliers. by the end of the decade.

So as the global battery industry begins to evolve and respond to changing macroeconomic conditions in 2024, we decided to see which battery stocks are favored by hedge funds. Some notable picks include EnerSys (NYSE:ENS), SolarEdge Technologies, Inc. (NASDAQ:SEDG) and Tesla, Inc. (NASDAQ:TSLA).

12 best battery stocks to invest in before they take off12 best battery stocks to invest in before they take off

12 best battery stocks to invest in before they take off

A close-up of a lithium-ion battery surrounded by a network of silicon nanowires.

Our Methodology

To create our list of the best battery stocks to buy, we ranked the U.S. listed battery stocks from the Global It then ranked the stocks that had fallen in value year to date based on the number of hedge funds that bought the stock in the fourth quarter of 2023, and selected the top stocks as the best battery stocks.

For these best battery stocks, we also mentioned hedge fund sentiment. Hedge funds’ top 10 consensus stock picks have outperformed the S&P 500 index by more than 140 percentage points over the past decade (see the details here). That is why we pay a lot of attention to this often ignored indicator.

12 best battery stocks to invest in before they take off

12. Sociedad Química y Minera de Chile SA (NYSE:SQM)

Number of hedge fund investors in the fourth quarter of 2023: 17

YTD stock price drop: 26.58%

Sociedad Química y Minera de Chile SA (NYSE:SQM) is a Chilean chemical company that supplies cathodes and other battery products to battery manufacturers and other companies. As the global lithium industry slows, the company has also struggled financially, missing analysts’ profit estimates in three of the last four quarters.

For their stock holdings in the fourth quarter of 2023, 17 of the 933 hedge funds covered by Insider Monkey’s research had purchased shares of Sociedad Química y Minera de Chile SA (NYSE:SQM). Ken Griffin’s Citadel Investment Group was the company’s largest investor thanks to its $30.4 million stake.

SolarEdge Technologies, Inc. (NASDAQ:SEDG), Sociedad Química y Minera de Chile SA (NYSE:SQM), EnerSys (NYSE:ENS) and Tesla, Inc. (NASDAQ:TSLA) are some of the top battery stocks used by hedge funds. pile up.

11. Sigma Lithium Corporation (NASDAQ:SGML)

Number of hedge fund investors in the fourth quarter of 2023: 18

YTD stock price drop: 57.84%

Sigma Lithium Corporation (NASDAQ:SGML) is a Brazilian lithium mining company headquartered in Sao Paulo, Brazil. 2024 will be a pivotal year for the company as media reports indicate that Sigma Lithium Corporation (NASDAQ:SGML) and Buffett-backed BYD are in talks to deepen their ties.

Insider Monkey’s December 2023 survey of 933 hedge funds found that 18 had had a stake in the company. Sigma Lithium Corporation’s (NASDAQ:SGML) largest hedge fund investor is Jos Shaver’s Electron Capital Partners, as it owns $69.7 million worth of shares.

10.Plug Power Inc. (NASDAQ:PLUG)

Number of hedge fund investors in the fourth quarter of 2023: 19

YTD stock price drop: 25.38%

Plug Power Inc. (NASDAQ:PLUG) is an electric vehicle battery technology company developing hydrogen-based fuel cell systems. Investors were in for some good news in February 2024 after Roth MKM upgraded the stock to Buy from Hold and raised the price target from $4.5 to $9.

Insider Monkey looked at 933 hedge fund portfolios for last year’s December quarter and 19 Plug Power Inc. shareholders. (NASDAQ:PLUG) found. Vince Maddi and Shawn Brennan’s SIR Capital Management owned the largest stake worth $7.7 million.

9. QuantumScape Corporation (NYSE:QS)

Number of hedge fund investors in the fourth quarter of 2023: 20

YTD stock price drop: 5.22%

QuantumScape Corporation (NYSE:QS) is a pure play battery stock developing solid-state lithium batteries for use in electric vehicles. While the company’s fourth-quarter financial results beat analyst estimates of a 34 cent loss per share with a 23 cent share in the segment, shares still fell after the results failed to inspire any optimism.

By the end of the fourth quarter of 2023, 20 of the. the 933 hedge funds tracked by Insider Monkey were the company’s shareholders. QuantumScape Corporation’s (NYSE:QS) largest hedge fund investor is Philippe Laffont’s Coatue Management due to its $23.2 million investment.

8. NIO Inc. (NYSE:NIO)

Number of hedge fund investors in the fourth quarter of 2023: 20

YTD stock price drop: 30%

NIO Inc. (NYSE:NIO) is a Chinese electric vehicle company. While we’ve tried to avoid automakers in this list of the best battery stocks, this deserves a mention because NIO Inc. (NYSE:NIO) plans to start making its own 150 kWh batteries soon later this year.

Insider Monkey’s December 2023 survey of 933 hedge funds found that 20 had invested in NIO Inc. (NYSE:NIO). Of these, the largest stakeholder was Jos Shaver’s Electron Capital Partners, as it owned $40.1 million worth of shares.

7. BHP Group Limited (NYSE:BHP)

Number of hedge fund investors in the fourth quarter of 2023: 24

YTD stock price drop: 14.3%

BHP Group Limited (NYSE:BHP) is critical to the stability of the battery industry as it is one of the largest mining companies in the world. When it comes to batteries, the company is responsible for mining and selling crucial metals such as copper and nickel. The shares have an average buy rating and the average analyst price target is $66.45.

During the final quarter of last year, 24 of the 933 hedge funds covered by Insider Monkey had a stake in the company. The largest hedge fund investor in BHP Group Limited (NYSE:BHP) is Ken Fisher’s Fisher Asset Management, as it owns 19.9 million shares worth $1.3 billion.

6. Enovix Corporation (NASDAQ:ENVX)

Number of hedge fund investors in the fourth quarter of 2023: 25

YTD stock price drop: 6.52%

Enovix Corporation (NASDAQ:ENVX) is a pure-play battery manufacturer headquartered in Fremont, California. The company’s fourth-quarter results weren’t helpful for the shares, as they fell 2% after Enovix Corporation (NASDAQ:ENVX) reported revenue of $7.3 million and a loss of 36 cents per share. Revenue exceeded analyst expectations, but loss per share missed them.

25 of the 933 hedge funds included in Insider Monkey’s Q4 2023 database had invested in Enovix Corporation (NASDAQ:ENVX). Jos Shaver’s Electron Capital Partners owned the largest stake worth $40.5 million.

Enovix Corporation (NASDAQ:ENVX) joins EnerSys (NYSE:ENS), SolarEdge Technologies, Inc. (NASDAQ:SEDG) and Tesla, Inc. (NASDAQ:TSLA) in our list of the best battery stocks.

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Disclosure: None. 12 best battery stocks to invest in before they take off was originally published on Insider Monkey.

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