To The Moon

$MP Materials Corp.(MP)$

After a chaotic few weeks in the markets, a familiar theme is roaring back to life — strategic resources and geopolitical leverage. This time, it’s not oil or semiconductors grabbing the spotlight, but rare earth elements (REEs) — the crucial building blocks behind everything from electric vehicles and wind turbines to AI servers, fighter jets, and smartphones.

Last week, U.S. rare earth miners surged after President Donald Trump declared that the United States would “retaliate” against China’s export controls on key critical minerals. The move reignited investor speculation that the U.S. could accelerate efforts to secure its own domestic supply chains — a theme that could reshape the global materials market in the coming years.

MP Materials Leads the Charge: 400% YTD Surge

At the center of this comeback story is MP Materials (NYSE: MP), the California-based operator of the Mountain Pass Mine, America’s only large-scale rare earth facility. MP’s share price has skyrocketed over 400% year-to-date, outpacing nearly every other U.S.-listed mining or resource stock.

The stock’s momentum reflects both fundamental demand for REEs — such as neodymium and praseodymium (NdPr) — and a renewed political push for resource independence. Rare earths are essential for high-performance magnets used in EV motors, defense systems, and next-generation AI hardware.

Investors are viewing MP not just as a mining company, but as a strategic national asset — the American equivalent of Saudi Aramco in the energy world. As AI infrastructure, clean energy, and defense spending expand, the company is positioned at the intersection of multiple structural growth trends.

Rare Earths: The “New Oil” in an AI-Driven Economy

While the term “rare earths” often sounds niche, their strategic importance has quietly grown with the rise of AI computing, electric mobility, and green technologies.

• AI Infrastructure: Advanced data centers, GPUs, and cooling systems require specialized components containing REEs for performance efficiency.

• Electric Vehicles: Each EV motor uses roughly 1–2 kilograms of rare earth magnets, making them indispensable for the green transition.

• Defense Systems: From missile guidance to radar arrays, REEs are fundamental to modern military technology.

With the U.S. and China locked in a tech-resource Cold War, rare earths have become the new oil — a material underpinning both economic competitiveness and national security. The difference this time is that China controls over 70% of global rare earth production and over 90% of processing capacity. That imbalance has now become a strategic vulnerability for the U.S.

Trump’s Tough Talk Rekindles Resource Nationalism

Trump’s latest comments — warning of retaliatory measures against China’s export curbs — sent rare earth stocks soaring across the board. Investors interpreted it as a signal that Washington may reimpose subsidies, tax incentives, or direct defense contracts to boost U.S. resource independence.

During his first term, Trump signed several executive orders classifying REEs as “critical to national security.” Under his potential second term, analysts expect those policies to be expanded, possibly including:

• Direct federal procurement of U.S.-produced rare earths

• Fast-track permits for domestic mining and processing

• Defense Production Act allocations for strategic stockpiles

• Tax incentives for companies building magnet manufacturing facilities in the U.S.

This rhetoric has been a tailwind not just for MP, but also for smaller players like Energy Fuels (NYSE: UUUU) and U.S. Rare Earths (USAR) — both of which have risen over 100% YTD on renewed investor optimism.

Supply Chain Rewiring: The Western Bloc’s Response

Over the past two years, the U.S., Europe, and Japan have been scrambling to diversify rare earth supply chains away from China. Projects in Australia, Canada, and the U.S. Southwest are now receiving government funding and strategic partnerships.

In particular, MP Materials has struck a multi-year deal with General Motors to supply rare earth magnets directly for EV motors — a move that could help establish a vertically integrated supply chain within the U.S. for the first time in decades.

Meanwhile, the Department of Defense has awarded grants worth hundreds of millions of dollars to expand rare earth separation capacity domestically — a critical step in reducing dependence on Chinese refiners.

If these efforts gain traction, the U.S. could move from being a rare earth importer to a self-sufficient producer within the next decade — a transition that would carry massive implications for both markets and geopolitics.

Valuation and Fundamentals: Is MP Overheating?

MP Materials’ meteoric rise has drawn comparisons to the early lithium boom of 2020–2021 — when investor excitement outpaced earnings reality.

Currently, MP trades at valuations that imply strong future cash flow growth, but its profitability remains heavily dependent on rare earth spot prices, which are historically volatile. The company generated robust EBITDA margins during 2021–2022 when prices surged, but recent quarters have seen margins tighten as China’s production ramped up and global demand normalized.

Analysts note that long-term contracts and vertical integration into magnet production could stabilize MP’s earnings profile. Still, investors must recognize that commodity cycles are inherently cyclical, and current valuations might already be pricing in a bullish scenario.

The Bull Case: Strategic Scarcity Meets Structural Demand

The bullish thesis for MP and rare earths broadly rests on two enduring trends:

1. Structural Demand Growth – Driven by EVs, renewable energy, and AI hardware expansion.

2. Geopolitical Scarcity Premium – As Western countries seek “friend-shoring,” REE prices may rise as production relocates to higher-cost jurisdictions.

This combination — scarcity and strategic necessity — is reminiscent of energy markets in the 1970s or semiconductors in the 2020s. The longer the U.S.-China standoff continues, the stronger the case for domestic rare earth champions becomes.

The Bear Case: Political Hype and Price Volatility

Skeptics warn that this may not yet be a “supercycle,” but rather a politically driven rally. Past cycles in rare earth markets — notably in 2011 — saw prices collapse by more than 70% within a year once geopolitical tensions eased and speculative demand cooled.

The reality is that China still controls the refining stage, and any U.S. build-out will take years to fully scale. Even with political support, domestic miners may struggle to compete on cost without significant subsidies or long-term offtake agreements.

Thus, investors should distinguish between strategic importance and investment timing — rare earths may indeed be vital to the 21st-century economy, but that doesn’t guarantee smooth, linear returns for shareholders.

Verdict: Long-Term Strategic Buy, Short-Term Volatile Trade

At this juncture, MP Materials represents a strategic long-term holding for investors betting on U.S. resource independence, AI infrastructure growth, and green energy expansion. However, given the sector’s history of volatility and political sensitivity, near-term pullbacks are inevitable.

Suggested Entry Zone: $22–$28 (accumulation range on corrections) Long-Term Target: $50+ (as magnet production and U.S. supply chain localization mature)

For more aggressive traders, volatility can be a friend — but for long-term investors, the key is patience. The geopolitical and technological trends aligning behind rare earths are multi-decade in nature, much like the early stages of the oil or semiconductor revolutions.

Key Takeaways

1. MP Materials has surged 400% YTD on U.S.-China tensions and rising strategic resource awareness.

2. Rare earths are the “new oil” powering the AI, EV, and defense industries.

3. U.S. policy momentum favors domestic supply chains — potentially reshaping global market dynamics.

4. Short-term volatility is high, but the long-term secular case remains strong.

5. Investors should accumulate gradually on dips, focusing on fundamental progress rather than political noise.

Bottom Line: Rare earths are moving from the shadows of the periodic table to the forefront of global strategy. In a world racing to secure the materials that power AI, green tech, and defense, companies like MP Materials may indeed represent the new oil wells of the digital era — volatile, strategic, and potentially transformative.

Would you bet on rare earths as the next great U.S. industrial story — or is this another short-lived political cycle? The answer, as always, depends on how long investors are willing to stay patient in a market built on scarcity and geopolitics.