MP Materials: A Strategic Buy Amid Geopolitical Shifts

MP Materials Corp is the largest rare earth materials producer in the Western Hemisphere. The company has recently partnered with the Department of Defense and Apple Inc, which could boost its business. Geopolitical shifts and increased demand for rare earth materials are expected to drive growth in the industry. MP Materials' position as a leading producer makes it an attractive investment opportunity.

MP Materials Corp (NYSE: MP), the largest producer of rare earth materials in the Western Hemisphere, has recently secured strategic partnerships with the Department of Defense (DoD) and Apple Inc. (AAPL), which could significantly boost its business. These partnerships, coupled with geopolitical shifts and increased demand for rare earth materials, position MP Materials as an attractive investment opportunity.

The company's recent agreements with the DoD and Apple represent a transformational shift for MP Materials. In July 2025, the DoD entered a 10-year agreement with MP Materials, committing to purchase NdPr products at a price floor of $110 per kilogram. Additionally, Apple has partnered with MP Materials to supply recycled rare earth feedstock processed in California, with magnet shipments anticipated to begin in 2027 [1].

These partnerships aim to reduce the reliance on Chinese supplies and secure long-term supply chains for high-tech products and automotive manufacturing. The growing demand for rare earth elements (REE) is driven by the electric mobility, industrial, robotics, and defense sectors, with the NdPr market expected to grow at a CAGR of 8.4% through 2040 [1].

MP Materials' financial performance has shown significant improvement since its partnerships. The company reported a 84% revenue growth and 24% adjusted EPS growth in Q2 FY25, driven by a 45% increase in REO production volume and a 119% increase in NdPr production [1]. The company's transition to producing midstream products and ceasing REO shipments to China has been a strategic move to focus on the U.S. market.

The company's recent $650 million equity offering underscores its capital strength and ability to pursue ambitious growth initiatives [2]. Despite a 183% share price increase, the current price of $67.51 is above the consensus analyst price target of $60.40, suggesting potential headwinds or risks associated with the company's growth plans [2].

Investors should remain vigilant about these risks, including the company's reliance on a few key customers and the potential impact of geopolitical tensions on supply chains. However, MP Materials' strategic developments and financial strength position it for potential growth, making it an attractive investment opportunity for those willing to navigate the risks.

References:
[1] https://seekingalpha.com/article/4811297-mp-materials-a-buy-fueled-by-geopolitical-shifts
[2] https://www.ainvest.com/news/mp-materials-secures-650m-equity-offering-partners-apple-dod-rising-stock-market-green-tech-interest-2508/