Lithium producer Albemarle is Thursday's IBD Stock Of The Day as it breaks out after blowing away first-quarter earnings forecasts late Wednesday and amid a continued ascent for lithium prices. Higher prices and rising demand for stationary energy storage systems powered the best quarterly earnings per share since the second quarter of 2023.

On Thursday, the price of lithium carbonate rose 1.6% to nearly $28,000 per metric ton, according to Trading Economics, providing more fuel for lithium stocks. The price of the key battery input is up 192% from a year ago in China.

Yet despite the lithium bull market, prior boom-bust episodes are keeping Albemarle cautious. The company paid down $1.3 billion in debt. "As the global operating environment remains uncertain, we are focused on the things within our control, including operational excellence, cost and productivity discipline and cash generation to enable long-term volume and earnings growth," CEO Kent Masters said in the earnings statement.

Albemarle Earnings

Results: Albemarle earnings per share surged to $2.95 a share vs. a year-ago loss of 18 cents, more than doubling forecasts of $1.19, according to FactSet. Revenue rose 33% to $1.429 billion, about $100 million above estimates.

Energy storage sales leaped 70% to $891.2 million as sales volume rose 14% and pricing 51%. Sales for stationary storage to support the electric grid and provide backup power for data centers rose 117%, while EV-related sales rose 3% as larger battery sizes offset lower output.

Albemarle's specialty chemical segment saw sales rise 12% to $358.4 million amid higher pricing and volume for bromine.

Outlook: On Thursday morning's earnings call, Masters noted that global lithium consumption rose 37% from a year ago in February. The current pace is toward the top of Albemarle's 15% to 40% growth forecast range for 2026.

However, Albemarle said it expects 2026 energy storage sales volumes to be flat vs. 2025, with production growth offsetting a 2025 drawdown in inventories. The company expects to increase output of lithium carbonate in 2027 to a range of 240 kilotons-260 kilotons from around 235 in 2025 and 2026, with minimal additional capital spending.

Albemarle Stock

Albemarle stock jumped 6.9% to 206 Thursday afternoon, but well off the intraday high of 221 as the broad market faded. Shares are just holding a 206 buy point from a seven-week cup base, according to MarketSurge. The buy zone runs through 216.30.

ALB stock previously eclipsed the buy point on April 16, before falling back into a narrow trading range the past few weeks.

ALB is among the top performing S&P 500 stocks on Thursday, behind Datadog, Fortinet, Qualcomm and Axon Enterprise.

Chilean lithium and fertilizer producer SQM edged up 0.1% to 93.59, backing off the morning's two-year high but out of buy range. Existing SQM investors could use a move past the April 16 high of 95.46 as an add-on entry.

Be sure to read IBD's The Big Picture column after each trading day to get the latest on the prevailing stock market trend and what it means for your trading decisions.

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