First Majestic Silver's Volatility: A Strategic Entry Point Amid a Secular Silver Bull Market?

The silver market in 2025 is experiencing a structural bull case driven by persistent supply deficits, declining inventories, and surging industrial demand. For investors, this backdrop raises a critical question: Can short-term volatility in First Majestic Silver (AG) be leveraged as a strategic entry point into a stock poised to benefit from this long-term trend?

AG's Recent Volatility and Pullbacks

First Majestic Silver (AG) as of December 29, 2025, . However, the stock has exhibited significant short-term volatility, with , 2025. Analysts remain divided on near-term price action, with some forecasting a rise , 2026, while others anticipate a pullback , 2026. This volatility, while daunting, may reflect broader market uncertainty rather than fundamental weakness in the company.

The Structural Bull Case for Silver

The silver market is in its fifth consecutive year of structural deficits, with a cumulative shortfall . By 2025, the annual deficit is projected to reach 95 million ounces, driven by stagnant mine production and surging industrial demand. Silver's role in renewable energy (solar panels), electronics, and electric vehicles (EVs) has become indispensable, with industrial demand now accounting for 50–60% of total consumption according to industry data.

Supply constraints are equally severe. , and inventories at key hubs like COMEX and London vaults have fallen to record lows according to market analysis. Analysts at Carbon Credits note that silver's undervaluation relative to gold-reflected in a compressed gold-silver ratio-suggests further upside potential, with technical indicators pointing to price targets of $65–75 per ounce.

First Majestic's Strategic Position

First Majestic is well-positioned to capitalize on this bull case. In Q2 2025, the company produced 7.9 million , . This growth was fueled by the acquisition of Gatos Silver in January 2025, . Additionally, the company's 450 million convertible notes offering in December 2025 underscores its financial flexibility. Analysts maintain a "buy" rating, with .

Historical Volatility as a Buying Signal

AG's stock has historically rebounded from volatility. After following Q3 2025 earnings that missed expectations, , according to market analysis. , indicating continued market anticipation of price swings. This pattern suggests that pullbacks are often temporary, aligning with the long-term bull case for silver.

Risks and Considerations

While AG's exposure to rising production costs and potential substitution in industrial applications (e.g., in solar panels) pose risks, the structural bull case for silver remains intact. The company's strategic moves, including the proposed sale of the , aim to optimize its portfolio. Investors should view current pullbacks as opportunities to enter a stock poised to benefit from sustained silver price appreciation.

Conclusion

First Majestic Silver's volatility, while a short-term headwind, may represent a strategic entry point for investors aligned with the long-term structural bull case for silver. With industrial demand surging and supply constraints tightening, AG is well-positioned to outperform in a market where silver's dual role as both a monetary and industrial metal is increasingly valued.