Can MP Materials Stock Beat the Market in 2026?

As of Jan. 29, 2026, rare-earth miner and magnet manufacturer MP Materials (NYSE: MP) is beating the S&P 500 (SNPINDEX: ^GSPC). So far in 2026, MP has gained a little less than 11%, while the S&P 500 index has nudged about 1% higher.

Last year, the difference was even more pronounced. The S&P 500 finished 2025 nearly 18% higher, while MP Materials crushed the market with a roughly 224% gain.

Over a five-year period, an investment in MP would have outperformed the same investment in the S&P 500, as the chart below demonstrates.

MP Total Return Level data by YCharts

What exactly is driving MP Materials, and can it beat the market again in 2026? Let's take a look.

How MP has outrun the market

Long story short, the U.S. has a rare-earth problem, and it's running out of time to solve it. Like most of the world, it still depends on Chinese producers for the majority of its rare-earth processing and high-performance magnets. That's put the U.S. government in a thorny situation: Relations with China aren't exactly friendly, but without those magnets, a concerning number of high-tech applications -- defense systems, electric vehicle (EV) motors, electronics -- would grind to a halt.

Against this backdrop, MP Materials has emerged as a key player in the United States' effort to rebuild its domestic supply of rare-earth elements. Indeed, it controls one of the world's richest deposits of rare-earth elements, the Mountain Pass mine in California. It's also becoming one of the only fully integrated rare-earth companies that can turn ore into high-performance magnets.

Image source: MP Materials.

In 2025, MP's strategic importance surged after it inked a critical $400 million deal with the Department of Defense. Then, on the heels of that agreement, MP also announced a $500 million long-term deal with Apple to provide recycled magnets for its devices.

Both of these were huge votes of confidence for MP's future. They've also helped shift MP from a pure mining business (its magnetics segment earned virtually no revenue in 2024) to a fully integrated company with a burgeoning magnetics arm (magnetics revenue was about $21.9 million last quarter).

At the same time, MP Materials is not yet capable of producing magnets at scale. Indeed, while it anticipates ramping up magnet production from its Fort Worth facility (Independence) in 2026, it's still a newcomer in magnet production and likely won't eliminate the United States' dependence on Chinese producers anytime soon.

Can MP beat the market in 2026?

It certainly has the potential to, yes.

MP has backing from the U.S. government and one of the biggest tech companies in the world. But for this mining stock to beat the market for consecutive years, it needs to prove it can scale magnet output. On that front, its Fort Worth facility is nearly operable, and its second magnet factory (10X Facility) might be commissioned in 2028. Revenue could grow meaningfully once both facilities are operating at scale.

The demand for high-performance magnets, with clear national support, make MP a solid long-term holding, in my opinion.

Steven Porrello 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.