The stock market has a habit of rewarding companies that sit at the intersection of geopolitics and industrial policy, and MP Materials is currently occupying that exact sweet spot. The rare earth producer’s shares climbed 6.8 percent on Friday to EUR 51.60, extending a 30-day rally of roughly 20 percent and underscoring how quickly sentiment has shifted around a company that remains deeply embedded in Western efforts to break China’s grip on critical minerals.
Friday’s advance followed a 2.9 percent gain on Thursday, when the company announced a multi-year, nine-figure supply agreement for separated gadolinium with an unnamed customer in the US defense and aerospace sector. The contract marks the first major commercialization of MP Materials’ heavy rare earth products — a milestone that carries strategic weight precisely because the customer’s identity remains undisclosed. When defense and aerospace players quietly lock up individual metals, it signals genuine nervousness about supply chain vulnerabilities.
The Operating Story Beneath the Headlines
The gadolinium deal may be the attention-grabber, but the fundamentals have been improving steadily. In the second quarter of 2026, MP Materials grew revenue 89 percent year-over-year to USD 108.5 million, while adjusted EBITDA swung from a USD 12.5 million loss to a USD 28.5 million profit. NdPr production — the neodymium-praseodymium oxide that serves as the core input for permanent magnets — rose 41 percent to 840 tons, with sales volumes of 1,006 tons representing a 127 percent jump.
The balance sheet adds further ballast. With USD 1.45 billion in cash, the company can fund investments that smaller competitors cannot contemplate. Capital expenditures reached USD 230.3 million in the quarter, including an USD 80 million acquisition related to the 10X facility in Northlake, Texas, supported by a partnership with the US Department of Defense.
That defense relationship has proven particularly valuable. A price floor agreement guaranteeing USD 110 per kilogram for NdPr oxide through 2035 contributed USD 17.6 million in quarterly revenue. The arrangement provides a cushion against Chinese export policy shifts — exports of rare earth metals have fluctuated significantly, and China controls roughly 98 percent of global dysprosium production and 99 percent of yttrium output.
A Sector Caught in Geopolitical Crosscurrents
MP Materials’ recent gains did not occur in isolation. A broader rally across US critical minerals stocks has been fueled by Chinese export data for July that came in well below prior-year levels, tightening global supply. The company also launched “Project Swarm” in early August, an initiative offering reserved production capacity for NdFeB magnets at its Texas facility to drone and motor manufacturers without binding purchase commitments — an attempt to lock in demand early, though its effectiveness will only be proven by actual orders.
Should investors sell immediately? Or is it worth buying MP Materials?
The strategic positioning extends beyond individual contracts. Drone maker PDW has identified MP Materials as a key upstream magnet supplier in connection with a conditional USD 820 million loan agreement with the Department of Defense. Separately, magnet shipments to General Motors are slated to begin by year-end, and a USD 500 million Apple partnership is scheduled for 2027.
This pattern is repeating across the globe. India recently received twenty bids for a roughly USD 763 million program to build domestic sintered magnet manufacturing. The US and Japan are planning deep-sea mining at depths of 6,000 meters near Minami-Torishima to access yttrium, gadolinium, and dysprosium, with test extraction starting in 2027 and commercialization targeted for 2028 — at an estimated investment cost of USD 5.7 billion through 2040.
The Bull and Bear Case in Tension
Optimists point to the operational trajectory: rising revenue, positive EBITDA, a guaranteed price floor, and an expanding roster of defense and aerospace contracts. If the transition to magnet production proceeds as planned, the gadolinium agreement could foreshadow additional high-margin deals in sectors where supply security trumps cost sensitivity.
Skeptics, however, note that the stock remains 22 percent below its level of twelve months ago and roughly 43 percent off its 52-week high. The annualized 30-day volatility sits at approximately 75 percent — a figure that reflects unresolved debate about valuation. Institutional positioning tells a similar story: EverSource Wealth Advisors expanded its stake by 1,679.2 percent to 41,561 shares in the second quarter, while D.A. Davidson & Co. cut its position by 34.8 percent, selling 23,582 shares over the same period.
The critical test arrives with the fourth quarter of 2026, when MP Materials has targeted the start of commercial magnet deliveries. Comments from CFO Ryan Corbett at the Canaccord Genuity growth conference suggested progress, but they remain an interim status update rather than confirmation of completed shipments. A delay into 2027 — or a loosening of Chinese export restrictions — could quickly erode the pricing support that has underpinned recent gains.
For now, the stock trades as a proxy for a larger question: whether the West can genuinely reclaim rare earth supply chain sovereignty. Each contract, whether with an unnamed defense customer or with Apple, represents a building block in that effort. But until individual agreements translate into reliable, recurring cash flow, the gap between strategic importance and market valuation is likely to persist — and so, too, will the volatility that has defined this stock’s recent history.
Ad
MP Materials Stock: Buy or Sell?! New MP Materials Analysis from August 14 delivers the answer:
The latest MP Materials figures speak for themselves: Urgent action needed for MP Materials investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from August 14.
MP Materials: Buy or sell? Read more here...
