MP Materials Stock Is Caught Between China’s Shadow and America’s Rare Earth Ambitions

Something about MP Materials seems to be at odds with itself right now. The company has a $300 million investment from the Department of Defense. It has a long-term deal with Apple to get power. It runs the only large-scale mining and refining complex in the US for rare earths. Still, on July 7, its stock closed at $50.49, down almost 5% on the day and about 50% below where it traded in October of last year.

The difference between how important the company is strategically and how well it does in the market is what makes MP Materials stock so hard to read and so interesting.

The June selloff began when China’s Ministry of Commerce put MP Materials on an export control list. This meant that Chinese companies could not send the company goods that could be used for more than one thing. That one month, the stock dropped 13.4 percent, and most of that drop happened after the June 22 announcement. At first glance, that might seem very important. It is not possible for MP Materials to buy ore or sell finished magnets in China. But the point is the effects that spread. China has a huge share of the world market for equipment used to process rare earths. If a supplier wants to sell to MP Materials but uses parts made in China, that deal may now be limited. Even though it’s not obvious, supply chain friction can cost real money and real time during the build phase that needs a lot of capital.

The funny thing is that this is exactly why Washington has put so much money into the company. The Department of Defense gave MP Materials $400 million in stock and a $150 million loan to help the California facility at Mountain Pass grow. It also agreed to buy all magnet output from MP’s 10X facility in Northlake, Texas, and signed a pricing floor agreement for ten years. Companies that the government doesn’t see as strategically important don’t get that kind of support from the government.

After that, Apple signed a $500 million long-term supply agreement, showing that domestic rare earth magnets have a business case that goes far beyond defense procurement. Rare earth magnets are used in many things, such as the speakers in iPhones, electric motors, and systems that guide missiles. The story of demand isn’t just an idea.

Real operational progress was also seen in the results for Q1 2026. It brought in $90.6 million, which is 49% more than the same time last year. It was the highest amount of NdPr ever made in a quarter (917 metric tons), an increase of 63%. It’s clear that the Materials segment is growing. Costs are also going up—start-up costs went up a lot as the company increased magnet production—but that’s what an early stage of an industrial transition looks like. The company has had an operating loss for eleven quarters in a row, which sounds bad until you realize that it is basically starting from scratch in a new industry in the United States.

How much weight you give the valuation worry determines whether or not this stock is worth buying. That means that GuruFocus thinks it is worth $32.94, which is more than fifty percent more than what it is now. The forward price-to-sales multiple is over 15x, which is higher than the average of 1.5x for the industry. In the past few months, insider selling has been much higher than insider buying. These aren’t little flags.

On the other hand, fourteen analysts have given the stock a Buy rating and set a price target of $76 for 2026. If the 10X facility works as planned, the long-term earnings path looks very different from the current baseline of losing money. When a stock goes down, the structural argument doesn’t go away. It still stands that the US can’t afford to keep getting rare earth magnets from China.

It’s still not clear if MP Materials is a diamond in the rough or a case where the business case is too good to be true. Probably some of both, depending on how long the time frame is. There is a good chance that the next twelve months will show us a lot about this company’s ability to make the change from a mining operation to an integrated magnetics manufacturer. That’s the most important factor, and the market is now paying close attention to it.