1 Big Reason I'm Watching MP Materials Stock in 2025

MP Materials (NYSE: MP) stock is emerging as one of the top-performing stocks of the year in the metals and mining industry. The rare earth stock is up over 390% in 2025 so far, as of this writing.

MP Materials is the largest rare earth mining company in the U.S. and is already producing neodymium-praseodymium (NdPr) rare earth oxides and metals. The miner has also struck a couple of game-changing partnerships in recent months, which have largely fueled its stock price.

However, there's another big reason I'm watching MP Materials stock closely for the rest of 2025 -- and you should, too.

Image source: Getty Images.

From rare earth mining to magnets

Rare earth elements are used extensively in several industries, such as semiconductors, electronics, electric vehicles (EVs), renewable energy applications, and drones. The final form of rare earths applied in technologies like EV motors, wind turbines, and robots are neodymium-iron-boron (NdFeB) permanent magnets derived from NdPr oxides.

MP Materials is already mining NdPr oxides and metals and is moving up the value chain. It recently started selling magnetic precursor products.

The next and most crucial step is the production of NdFeB permanent magnets. That's where 2025 should be a transformational year for MP Materials as it expects to start production of magnets by the end of the year.

Big things ahead for MP Materials

This transition from mining to magnets is the biggest reason I'm watching MP Materials stock in 2025, more so because of the two mega deals the miner signed recently.

In July, MP Materials sealed a $500 million deal with tech giant Apple to supply rare earth magnets. MP Materials will produce these magnets from recycled feedstock and expects to start shipments by 2027.

The U.S. Department of Defense (DOD) also invested $400 million in MP Materials recently and became its largest shareholder as part of a comprehensive deal involving loans and offtake commitments with price floors for MP Materials' NdPr products. MP Materials will use the funds to build a second magnet manufacturing facility, expected to be commissioned by 2028.

Neha Chamaria 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.