SQM Shares Soar 1.74% on Lithium Demand Surge

Sociedad Quimica y Minera de Chile (SQM) shares rose 1.74% today, marking the third consecutive day of gains, with a total increase of 8.82% over the past three days. The stock price reached its highest level since March 2025, with an intraday gain of 5.75%.

The strategy of buying SQM shares after they reached a recent high and selling them one week later resulted in a significant underperformance. Over the past five years, the strategy yielded a return of -66.51%, which is a substantial loss compared to the benchmark return of 56.99%. The strategy had a maximum drawdown of -73.83%, indicating a high risk of substantial losses during market downturns. The Sharpe ratio of -0.85 and a volatility of 42.17% further highlight the strategy's risk profile, showing that while there was some level of volatility, the risk-adjusted returns were poor.

SQM's stock price has been closely tied to its earnings per share (EPS), which has seen a 22% annual decline over the past three years. This correlation indicates that market sentiment has been aligned with the company's fundamental performance, reflecting investor confidence in SQM's long-term prospects despite recent challenges.

In addition to EPS, the demand for lithium has been a significant driver of SQM's stock price. The increased demand for lithium has contributed to a surge in SQM's shares, highlighting the company's strategic position in the lithium market. This trend underscores the importance of lithium as a key component in the production of batteries for electric vehicles and other technologies, driving investor interest in SQM's stock.