A booming lithium market has sent several ASX lithium stocks into overdrive, with two standout performers delivering extraordinary returns for investors.
PLS Group Ltd (ASX: PLS) has risen 323% over the past 12 months, while Liontown Ltd (ASX: LTR) has climbed an even stronger 354%.
Recent momentum has also been strong. Over the past month alone, PLS shares are up 21%, while Liontown has jumped 42%.
The key catalyst has been a sharp rebound in lithium prices. Lithium carbonate prices have risen almost 60% in 2026 and are up roughly 180% over the past year as demand expectations continue to strengthen.
The global push toward clean energy and electric vehicles (EVs) remains the biggest long-term driver. At the same time, ongoing oil market volatility has reinforced the appeal of EV adoption globally, increasing optimism around future lithium demand.
But after such explosive gains, investors may be wondering whether these ASX lithium stocks can keep climbing.
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PLS Group
PLS Group has become one of the ASX's most closely watched lithium producers thanks to its strong production profile and large-scale operations.
The company benefits from established lithium exports, growing cash flow generation and significant leverage to higher spodumene prices. Investors have also been encouraged by improving sentiment across the broader battery materials sector.
However, lithium remains a highly cyclical commodity, and that creates risk for shareholders after a rally of this size. Any sharp pullback in lithium prices could weigh heavily on earnings expectations and market sentiment.
That caution is increasingly reflected in broker views on the ASX lithium stock. Morgans recently downgraded PLS shares to a trim rating and placed a $5.40 price target on the stock. With shares currently trading around $6.26, the broker sees limited near-term upside after the recent surge.
Even so, bullish lithium market conditions could continue supporting the share price if battery demand remains strong and supply growth struggles to keep pace.
Liontown
This $8 billion ASX lithium stock has also ridden the lithium rebound aggressively higher as investors look toward the company's production growth potential.
The market has become increasingly optimistic about Liontown's long-term ability to benefit from stronger lithium pricing and expanding EV demand globally.
Its development pipeline and exposure to future battery supply chains continue attracting investor attention, particularly as major automakers and battery manufacturers seek secure lithium supply.
Still, Liontown carries its own risks. Development-focused miners can face funding pressures, operational execution challenges and sensitivity to commodity price swings.
Analyst sentiment also appears more balanced following the recent rally. According to CommSec data, Liontown shares currently carry a consensus hold rating among 12 analysts covering the stock.
Morgans this week also downgraded Liontown shares from hold to trim, although it lifted its price target to $2.20, which is below the current share price.
Foolish Takeaway
For investors, the outlook for both ASX lithium stock may ultimately depend on whether lithium prices can continue their remarkable recovery.
If EV demand growth remains strong and supply stays constrained, these high-flying ASX lithium shares could still have room to run.
