Morgan Stanley Upgrades MP Materials (MP) to Overweight on US Supply Chain Push and Rare Earth Outlook

MP Materials Corp. (NYSE:MP) is one of the high short interest stocks to buy right now. On December 5, Morgan Stanley upgraded MP Materials to Overweight from Equal Weight with a price target of $71, up from $68.5. Morgan Stanley believes that the US’s critical mineral dependency issues are not resolved by China’s one-year pause on rare earth restrictions. As the US seeks to develop a robust supply chain outside of China, MP is well-positioned to benefit.

Earlier in the company’s Q3 2025 earnings report, MP Materials Corp highlighted record production and key strategic advancements. The company achieved a record NDPR oxide production of 721 metric tons, which marked a 21% sequential increase and a 51% year-over-year increase. MP also set records in sales volumes, showing strong sequential and year-over-year growth. MP Materials is on track to start commissioning its heavy rare earth circuit in mid-2026. This initiative will enable the production of 10,000 metric tons of high-performance NDFEB magnets annually.

Additionally, a major partnership with Apple (NASDAQ:AAPL) has commenced, marked by a $40 million prepayment for the production of magnets from recycled materials, with a total of $200 million expected as the project progresses. The company anticipates the next payment from Apple in Q4, with initial magnet volumes targeting mid-2027 and recycling shortly after. This partnership, alongside the long-term Purchase Price Agreement with the Department of War, provides earnings visibility and is expected to help the company return to profitability in Q4 2025.

MP Materials Corp. (NYSE:MP), together with its subsidiaries, produces rare earth materials in the Western Hemisphere. The company operates in two segments: Materials and Magnetics.

While we acknowledge the potential of MP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.