A handful of leading investment banks, led by industry luminary JP Morgan Chase & Co, are now backing lithium stocks for a resurgent year in 2026.
This continued upward momentum is predicated on surging lithium carbonate prices continuing to lead the way as the main catalyst to higher valuations. Already, lithium carbonate spot prices have rallied a full 50% off a four-year low, signalling a pronounced long-term trend reversal.
Big Banks See Blue Skies
“We have upgraded our 2026/27 forecasts from $8,000/t to $11,000/ – $12,000/t…” according to an October 2025 research report on lithium’s rising fortunes. Much of this demand is being driven by very high demand for energy stationary storage (ESS) systems – lithium-battery-powered back-up storage units for AI and other industrial needs.
Figure 1: Lithium Carbonate Spot Price Chart, showing 92,300 CYD as at November 21st, 2025
Similarly, investment banking heavyweight Citigroup is bullish on lithium, too – recently forecasting a 31% price increase in 2026. This rally is expected to be driven by a 45% rise in demand for ESS systems, as well as a 26% jump in electric vehicle adoption. Â
Many investment banks agree that market forces will be moving from a recent glut in lithium production to a looming shortfall within several years. This bodes well for the share prices of beaten-up lithium stocks, several of which are finally rallying back from all-time lows early this summer.
Lithium Oversupply Coming to an End
The lithium supply overhang over the past several years stems from anticipated appetite for EVs that has yet to fully materialize.  Global EV sales climbed past 17 million units in 2024 and are projected to top 20 million units in 2025. Yet, a 22 percent surge in mine supply last year has outpaced demand, pushing lithium carbonate spot prices lower and allowing oversupply to persist.
However, a rebalancing of supply/demand is already occurring due to new supply expansions being delays, as well as mine closures, and unexpectedly high demand growth (particularly for AI). This is changing sentiment across the whole supply chain, especially for up-stream lithium mining companies, as well as explorers. Â
A New Dawn for Lithium Miners and Explorers
The sole U.S.-based lithium miner, Albermale, has seen its share price double over the past year. Among the investment banks that are signalling renewed confidence in this iconic lithium mining power player is UBS.
UBS just upgraded Albemarle (NYSE:ALB) from Neutral to Buy and raised its price target to $185.00 from $107.00. UBS even forecasts a lithium market deficit beginning in 2026, driven largely by a surge in energy storage demand.
This renewed industry-wide optimism is shared by China’s leading lithium miners. They include Ganfeng Lithium Group Co. Its Chairman — Li Liangbin — was recently quoted predicting a 30-40% demand growth next year.
Among the other beneficiaries of a resurgent lithium market are the explorer/developer mining juniors. They include American Lithium (TSX.V: LI) (US OTC: AMLI). This Canadian-headquartered mining company is advancing two of the largest in-development lithium projects in the Americas. Â
The company’s interim CEO, Alex Tsakumis, cites the recent wave of U.S. federal support for domestic critical minerals projects — including new funding commitments, policy incentives, and direct investments in strategic lithium projects — as evidence of renewed confidence in the sector heading into 2026.
“Lithium is no longer defined solely by EVs,” Tsakumis stated. “The evolution of AI, large-scale data centres, battery storage, defence technologies and industrial electrification are now adding demand, creating a more ever-growing and diversified market than ever before.”
ABOUT THE AUTHOR: Marc Davis has decades of capital markets experience as an analyst, commentator, and financial journalist. His work has appeared in outlets such as USA Today, Reuters, Barron’s, Bloomberg, and the Financial Post, and he has been featured on the BBC, CBC, and SKY TV. His commentary is for information and entertainment only and is not investment advice. Consult a licensed advisor before investing. The author holds long-term positions in certain critical minerals stocks, including American Lithium.
