MP Materials (NYSE: MP) was on the rise in 2025. By the end of the year, shares of the permanent magnet maker and rare earth miner were up 224%. At one point in October 2025, MP shares were up around 440%, before a broader sell-off in the market brought the stock back down to earth.
MP stock is currently beating the market, with a gain of about 10.5% so far this year. However, even with the political winds in its favor, some things must go right for this rare earths company to have another successful year.
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MP Materials is a US-based rare earths company that owns and operates the Mountain Pass mine in California, which is currently one of the only large-scale rare earth mines in the country. It also operates a facility called Independence in Fort Worth, Texas, that can convert rare earth material into permanent magnets that generate their own magnetic field.
MP is currently at a crossroads of geopolitical and economic currents. Rare earth magnets are vital to the technology, defense and clean energy sectors. But for years the United States has relied heavily on China for magnet supplies, giving Beijing leverage over the United States.
In July 2025, the Department of Defense (DoD) invested $400 million in MP, becoming its largest shareholder, and entered into a public-private partnership with the company. Under the agreement, the Department of Defense will purchase 100% of the magnets produced at its second U.S. magnet factory for 10 years after the facility is built. It also guaranteed a generous minimum price of $110 per kilogram for MP’s neodymium-praseodymium (NdPr) product.
That news helped MP stock end July up more than 100%.
If you believe that demand for rare earths will increase and that the United States will continue to look for ways to reduce its dependence on China, MP looks like a long-term buy.
That said, metal stocks could see ups and downs in the near term.
At its current price (about $61 per share), MP trades at 43 times sales, meaning investors are paying today for revenue that the company has yet to prove it can earn. For perspective, the average P/S ratio for mining and metals companies is about 3.8.
The deal with the Department of Defense is crucial to helping MP become profitable in the near term, but it is not guaranteed to last in its current form. The agreement itself says that continued MP funding is still subject to congressional approval. Any changes in government or budget priorities could also affect the agreement with MP.