MP Materials Soars 8.56% on Pentagon Partnership and Rare Earth Expansion Hype—What’s Next?

Summary
• MP Materials (MP) surges 8.56% intraday to $77.33, hitting a 52-week high of $82.23
• Pentagon’s $400M preferred stake and Apple’s $500M magnet supply deal drive speculation
• Intraday volume spikes to 23.8M shares, 18.37% of float, signaling aggressive institutional interest

MP Materials has ignited a frenzy in the rare earth sector, surging over 8% in a single session amid a historic Pentagon partnership and a landmark Apple supply agreement. The stock’s sharp move reflects a confluence of geopolitical strategy, industrial policy, and corporate execution risk. With the DoD now its largest shareholder and Apple securing magnet production, investors are weighing whether this is a sustainable inflection point or a short-term hype-driven rally.

Pentagon Partnership and Rare Earth Expansion Drive MP Materials' Surge
MP’s 8.56% intraday jump is directly tied to the U.S. Department of Defense’s $400 million preferred equity investment and a 10-year offtake agreement for 10,000 metric tons of rare earth magnets. The Pentagon’s stake—convertible into a 15% common equity position—signals a strategic shift toward onshoring critical mineral supply chains. Simultaneously, Apple’s $500 million partnership to build a Texas-based magnet factory and recycling facility has amplified demand visibility. These moves, coupled with the company’s public-private partnership with the DoD, have transformed MP from a speculative rare earth miner into a cornerstone of U.S. industrial policy, triggering a re-rating of its risk-reward profile.

Industrial Metals Sector Mixed as MP Materials Outperforms
While the broader industrial metals sector remains volatile, MP Materials’ rally is distinct from its peers. Freeport-McMoRan (FCX), the sector’s leader, fell 6.46% on concerns over Chinese demand, highlighting divergent narratives. MP’s gains stem from government-backed revenue guarantees and a vertically integrated supply chain, whereas FCX’s exposure to cyclical commodities like copper leaves it vulnerable to macroeconomic shifts. This divergence underscores MP’s unique positioning as a policy-driven growth story rather than a commodity play.

Options and ETFs Highlight Bullish Momentum Amid High Volatility
• MACD: 1.78 (bullish divergence), Signal Line: 1.12, Histogram: 0.66
• RSI: 69.23 (overbought but within range)
• Bollinger Bands: Price at 77.33 (above upper band of 76.41)
• 200D MA: 35.22 (far below current price)

MP’s technicals suggest a continuation of its bullish trend, with key resistance at $82.23 (52-week high) and support at $68.80 (intraday low). The RSI’s 69.23 reading indicates overbought conditions but remains within acceptable bounds for a high-momentum stock. The MACD’s positive histogram and bullish divergence reinforce the case for holding long positions. Given the stock’s volatility and high implied volatility in options, leveraged call options offer asymmetric upside potential.

Top Options Picks:
• MP20251003C75 (Call, $75 strike, 2025-10-03):
- IV: 103.96% (high volatility)
- Delta: 0.59 (moderate sensitivity)
- Theta: -0.45 (rapid time decay)
- Gamma: 0.031 (moderate sensitivity to price swings)
- Turnover: $753,527 (high liquidity)
- LVR: 12.95% (moderate leverage)
- Payoff at 5% upside ($81.19): $6.19/share
- This contract balances high IV with manageable delta, ideal for capitalizing on a continuation of the rally while mitigating time decay risks.

• MP20251003C78 (Call, $78 strike, 2025-10-03):
- IV: 91.02% (moderate volatility)
- Delta: 0.488 (lower sensitivity)
- Theta: -0.399 (moderate time decay)
- Gamma: 0.036 (higher sensitivity to price swings)
- Turnover: $184,243 (solid liquidity)
- LVR: 19.84% (attractive leverage)
- Payoff at 5% upside ($81.19): $3.19/share
- Offers a more conservative entry with higher gamma, making it suitable for a pullback scenario before a breakout.

Aggressive bulls should consider MP20251003C75 for a near-term breakout play, while MP20251003C78 provides a safer entry if the stock consolidates above $78.

Backtest MP Materials Stock Performance
The event-driven back-test has been completed.Key assumptions (auto-filled for you):1. Event definition = daily percent change ≥ 9 % (intraday surge) measured on close-to-close prices. 2. Back-test window = 30 trading days after each surge (industry convention when evaluating short-term momentum). 3. Price series used = split-adjusted close (more reliable for holding-period return calculations). 4. Sample period = 2022-01-01 to 2025-09-25, covering 28 qualifying events for MP Materials (ticker MP.N).Headline findings:• Average 1-day follow-up return: +1.62 % (win-rate ≈ 68 %). • Cumulative average 30-day return: +14.85 %, outpacing benchmark by ≈ 10 ppts. • Statistically significant excess performance detected on Day 2 and Day 29 in particular.For full interactive statistics and visualisation, please open the module below.Feel free to explore the interactive charts to examine return trajectories, win-loss statistics, and optimal holding-period insights.

MP Materials' Strategic Alliances Signal Long-Term Growth—Act Now on Bullish Setup
MP Materials’ rally is underpinned by structural tailwinds: government-backed revenue guarantees, a vertically integrated supply chain, and a critical role in U.S. national security. While short-term volatility is inevitable, the stock’s technicals and fundamentals align for a sustained move toward its 52-week high of $82.23. Investors should monitor the 200-day moving average ($35.22) as a baseline and watch for a breakout above $82.23 to confirm the trend. Meanwhile, sector leader Freeport-McMoRan’s -6.46% decline highlights the importance of policy-driven plays like MP in a fragmented market. For those seeking leverage, the MP20251003C75 call option offers a compelling risk-reward profile. Act now—this is a high-conviction trade for the next 30 days.