MP Materials Stock: Bull vs. Bear

Key Points

• The Department of Defense and Apple deals are great news, but what happens next?

• Trying to time the pullback in MP Materials stock is better left to the fortunetellers -- not smart investors.

• 10 stocks we like better than MP Materials ›

Skyrocketing more than 275% since the start of the year (as of this writing), shares of MP Materials (NYSE: MP) have benefited from strong investor interest in rare earth metals and magnets.

But could the stock continue its exceptional performance throughout the remainder of the year and beyond? Let's see how two Fool.com contributors tackle this question.

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It might be time to take some profits with this high-flying stock

Lee Samaha: Shares in MP Materials have had a tremendous run in 2025, trading up more than 270% year to date at the time of this writing. The incredible increase is due to a fundamental reframing of the company's growth prospects in light of the Trump administration's determination to ensure a domestic supply of rare earth materials and magnets.

It has culminated in a 10-year deal with the Department of Defense (DOD), explained in detail here. In addition, the company has signed an agreement with Apple that investors can look forward to.

Still, as ever in investing, the question remains: With these events somewhat priced in, what happens next? The bulls will argue that more deals will be forthcoming now that the DOD's commitment has derisked MP Materials' planned investment in the magnetic manufacturing facility (called the 10X Facility) and the expansion of its rare earth capability. They may well be right.

However, the flip side is that MP Materials now needs to execute on constructing facilities, which means incurring execution risk and securing $1 billion in financing from JPMorgan and Goldman Sachs before the 10X Facility begins commissioning in 2028.

As such, it might make sense to, at the least, book some profits here. Most of the good news may already be priced in the stock, there's execution risk and the possibility of dilution (the DOD could own 15% of the company as part of the deal), and there's no guarantee that new sources of rare earth materials won't come to the market in the meantime.

These blockbuster deals may be harbingers of what's to come

Scott Levine: You don't have to scour Warren Buffett's annual letters to shareholders to gain investing insights (although it's not a bad idea). There are some frequent nuggets of wisdom that investors will hear from diverse sources, one of the most common being that it's impossible to time the market. And this old adage is especially applicable to MP Materials right now.

With the stock's recent meteoric rise, it's reasonable to speculate that shares will level off at some point and probably even pull back some. The exact timing of when this will happen, of course, remains unknown. For current shareholders, the better course of action is to sit pat -- maybe add to your position if there's a pullback. Those eager to initiate a position should recognize that there's the potential that the stock will rise considerably higher and then trade a little lower only to rise again, leaving them with price points higher than where the stock is trading now.

While the Department of Defense deal has numerous benefits for MP Materials, the partnership with Apple is especially important because it demonstrates the pressing need for rare earths, which are essential in the manufacturing of everything from consumer electronics to healthcare technologies to aerospace and defense applications.

Companies involved in the manufacturing of these products, moreover, will want to shore up their supplies of rare earths and the magnets made with them. As the only fully integrated rare earth materials producer in the U.S. -- and soon producer of rare earth magnets -- MP Materials has a significant competitive advantage over the limited number of U.S. rare earth producers.

Is now a good time to buy MP Materials?

Valid arguments can be made on both sides of the coin with respect to whether MP Materials is a buy now. For those who have benefited from the stock's rapid rise over the past few months, trimming their positions and reallocating the capital may be a smart move. On the other hand, the stock has tremendous potential to rise higher in the future, and trying to time the stock's future dip may be a foolhardy exercise. Investors should closely examine risk tolerances and decide if they can withstand future volatility before picking up shares now.

Should you invest $1,000 in MP Materials right now?

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Lee Samaha has no position in any of the stocks mentioned. Scott Levine 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.