Here's Why MP Materials Stock Surged Again This Week

Key Points

• The loss of sales to a Chinese customer was more than compensated for by increased sales of rare-earth materials.

• The company's rare-earth magnet sales are ramping up nicely, as the company prepares for expansion to support the Department of Defense and Apple deals.

• 10 stocks we like better than MP Materials ›

Shares in rare-earth material and magnets company MP Materials (NYSE: MP) rose 11.6% in the week to Friday morning, and could possibly rise a lot more after the market digests its second-quarter earnings report.

MP Materials earnings

Investors will likely warm to the earnings report. The company reported an 84% revenue increase and a decreased loss, with adjusted earnings before interest, taxation, depreciation, and amortization (EBITDA) coming in with a $12.5 million loss compared to a $27 million loss in the same period of 2024.

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It's a good result under the circumstances because of the "strategic decision to cease shipments of rare earth concentrate to China as well as by the ramp-up in midstream operations."

China is, for now, the dominant player in global rare-earth magnet production, and MP Materials previously sold rare-earth materials to a Chinese customer.

However, a massive increase in its neodymium and praseodymium (NdPr) oxide revenue led to a 20% increase in materials sales to $37.5 million, and MP Materials' sales of its rare-earth magnets contributed $19.9 million in revenue.

Image source: Getty Images.

Where next for MP Materials

The results are relatively good, as the market anticipated some near-term pain (from losing its revenue to China). Still, the real long-term story here lies in its transformative deals with the Department of Defense and Apple.

These deals will transform MP Materials into a key part of ensuring the U.S. has a domestic supply of critical rare-earth materials and magnets in the future.

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Lee Samaha 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.