MP Materials Soars: The Rare Earth Rally That’s Defying Market Gravity

Rare earth miner MP Materials just blasted off—leaving Wall Street scrambling to explain the sudden surge.

Supply Chain Squeeze Sends Prices Skyward

Global production bottlenecks are creating a perfect storm for rare earth elements. MP's strategic positioning lets them capitalize while competitors struggle with logistical nightmares.

Green Energy Demand Ignites the Rally

Electric vehicle manufacturers and renewable tech companies are gobbling up rare earth materials faster than mines can produce. MP's output becomes more valuable with each new climate pledge.

Geopolitical Winds Fill the Sails

Trade tensions between major economies are reshaping supply routes. MP's domestic operations suddenly look like a strategic asset rather than just another mining stock.

The rally exposes how traditional analysts still underestimate material science plays in the tech transformation—but hey, that's why they're still debating P/E ratios while materials stocks moon.

The government is getting more involved in critical industries

On Tuesday, Reuters reported that the Trump administration is in talks to potentially take up to a 10% stake in lithium miner Lithium America. The investment was likely to come into the form of free warrants given to the government, which WOULD then seek to guarantee sales to American carmakers.

Then on Thursday, The Information reported that the Trump administration was now looking to take more stakes in several other U.S. companies engaged in mining critical materials, especially those engaged in mining battery materials.

While the U.S. has already inked a deal with MP Materials, the prospect of more strategic deals on the horizon is apparently getting investors more enthusiastic. And of course, even though the deal with MP entails a massive production increase and price floor, it's possible the government could expand that deal or cajole more commercial customers to buy rare earths from MP.

Image source: Getty Images.

State capitalism for miners?

While not unusual in other countries, it's not typical for the U.S. government to take equity stakes in public companies. But even though government equity stakes have been dilutive to shareholders, the majority of stocks in which the government has gotten involved as an active investor have taken off higher this year. Thus, it appears the backing of the administration is outweighing the negative dilutive effects in these companies -- at least for now.