Up 350% Year to Date, is the Party Over for MP Materials Corp Investors?

MP Materials (NYSE: MP) went public a few years back via a merger with a special purpose acquisition corporation (SPAC). Like many SPAC deals, there was initial excitement that eventually cooled off. At least until 2025, when MP Materials' unique focus led to a big investment from the U.S. government.

The business appears to have a huge growth opportunity ahead of it.

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What does MP Materials do?

MP Materials mines for and processes what are known as rare-earth metals. These metals are integral to today's advanced technology, used by tech companies to make the cellphone in your pocket and defense contractors to make the missiles used to protect entire nations. Modern technology wouldn't be possible without the products MP Materials produces.

There's one important missing piece to that story. China is the world's largest producer of rare earth metals. And it has shown no hesitance in using that fact to its advantage when dealing with other countries. The most recent example has come as the United States attempts to change the tariff regime as it currently exists. China limiting access to rare-earth metals is a massive risk for not just companies, but also entire countries.

In fact, the whole purpose of MP Materials' business is to be a rare-earth metals provider that operates in an economically and politically stable region. It wants to parlay that fact into relationships with customers needing a reliable supply of these materials. It was the story used to support the SPAC deal and it remains the story as the company starts to ramp up its business.

MP Materials just got a huge vote of support, and a lot of cash

MP Materials' basic business model has not changed since it went public. And it hasn't changed in 2025 even as the stock price has rocketed higher. But there has been a big shift in the outlook for the business just the same.

Essentially, MP Materials is a mining and materials company. It costs a lot of money to operate a this type of business and it takes a lot of time for the capital investments that are made to finally pay off. In other words, a key factor to look at with an upstart like MP materials is its balance sheet. Simply put, is there enough cash for the company to actually get where it wants to go?

That's not a big problem for MP Materials anymore. That's because it inked a large investment deal with the U.S. government. That deal was followed by a large partnership with Apple (NASDAQ: AAPL). And then that was followed up by a public stock sale that saw so much demand it was upsized.

MP Materials went from a good idea that might work out to one that seems almost certain to work out thanks to a huge influx of cash. Adding up the money from the three events noted above suggests that the company will see its cash balance cushioned by around $1.5 billion. That's going to help get the business up and running, which is only the start of the opportunity for the business and investors. Since rare-earth metals are largely coming from just one supplier today, MP Materials has a huge potential market for its products. And that could lead to huge long-term growth for the company.

Wall Street has reacted as you would expect

The problem with MP Materials as an investment is that Wall Street has clearly priced in a lot of good news. That's not unreasonable given the backstory, but it does increase investment risk. Has the stock's growth hit an emotionally driven peak, suggesting that the party could soon be over for investors? If you think in days and not decades, the answer could easily be yes given the idiosyncratic risk of the story here.

But if you think in decades, there is a very long-term opportunity for MP Materials as a business. And its growth as a business is only just getting underway. It isn't a "bet-the-house" type of investment, but the story is still very interesting. All in, more aggressive investors willing to accept some near-term turbulence might still find this stock alluring even after the big price run. Just go in knowing that this is a company that you may need to own for a long time to benefit from its business growth.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends MP Materials. The Motley Fool has a disclosure policy.