MP Materials Stock Gains as Rare Earths Supply Concerns Resurface

MP Materials stock (NYSE: MP) is on the rise in this morning's pre-market session, as renewed focus on rare earth supply chains, driven by potential restrictions from China boost sentiment.

The stock is up 5.1% at $74.19, and trades 196% higher over the past 6 months.

BMO Capital Markets has reinstated coverage of MP Materials with a “Market Perform” rating and a $76 price target. The firm acknowledges MP's strategic positioning as the “U.S.' rare earth champion,” particularly after its partnership with the Department of Defense (DoD).

The DoD acquired a 15% stake in MP Materials in early October 2025, solidifying its commitment to domestic supply chains for critical minerals. The substantial government investment underscores MP Materials' pivotal role in national security, bolstering investor confidence.

However, BMO Capital believes the market is accurately valuing the shares at current levels, given the company's future earnings visibility. This neutral stance suggests that while MP Materials holds significant potential, its current valuation reflects existing opportunities and challenges.

Developments and Capital Allocation

In July 2025, MP Materials announced a $500 million underwritten public offering of its common stock. These proceeds are earmarked for accelerating and expanding operations, including the development of the “10X Facility,” strategic growth opportunities, and general corporate purposes. While this capital raise signifies ambitious growth plans, the resulting dilution of existing shares may have contributed to mixed reactions among investors, leading to short-term volatility in the stock price.

Also in July, MP Materials secured a $500 million partnership with Apple to supply recycled rare earth magnets manufactured in the United States. This agreement involves expanding MP's Fort Worth, Texas facility to produce magnets from 100% recycled materials, with production slated to begin in 2027. The Apple partnership not only diversifies MP Materials' customer base but also aligns with growing sustainability trends, enhancing the company's market appeal.

Earlier in April 2025, MP Materials halted shipments of rare earth concentrate to China due to retaliatory tariffs and export controls imposed by China in response to U.S. trade measures. The company emphasized that this move aligns with U.S. national interests, focusing on enhancing domestic capabilities. While this decision reflects a commitment to national interests, it may have raised concerns about short-term revenue impacts.