MP Materials Shares Surge on Sector Rotation and Strategic Backing

After a punishing 50% decline to close out 2025, the rare earths producer MP Materials has staged a powerful rebound. A nearly nine percent surge at the start of 2026 trading has investors questioning whether this marks a long-awaited bottom or merely a short-term bounce for the mining sector.

The move appears driven by a broad-based rotation of capital into critical minerals. On Friday, shares climbed to $54.97, accompanied by trading volume significantly above average. This 8.81% gain coincided with a 7.4% rise in the sector benchmark, the SPDR S&P Metals & Mining ETF (XME). Market participants are seemingly repositioning for the ongoing electrification mega-trend and rising global defense expenditures. For MP Materials, this advance provides a crucial vote of confidence following a drastic correction from its October peak above $100 per share.

The investment thesis for the company is fundamentally anchored by a key agreement finalized in July 2025 with the U.S. Department of Defense. This pact guarantees a price floor of $110 per kilogram for specific neodymium-praseodymium (NdPr) products, effectively shielding the business from extreme market volatility. Further solidifying its outlook are strategic partnerships with technology giant Apple and a joint venture with Saudi Arabian mining company Maaden.

Operationally, management has forecast a return to profitability for the fourth quarter of 2025. Progress was already visible in Q3, where NdPr oxide production jumped 51% year-over-year to 721 metric tons. This increase occurred despite a revenue dip caused by the cessation of concentrate sales to China.

Should investors sell immediately? Or is it worth buying MP Materials?

Insider Action and Sustained Analyst Confidence

Sentiment is also being bolstered by signals from the company's leadership. A mandatory filing on January 3 revealed that director Maryanne Lavan converted compensation rights into company stock. While not a direct open-market purchase, market observers typically interpret such moves as an alignment of management's interests with those of shareholders.

The view from Wall Street remains decidedly optimistic. The average analyst price target stands at approximately $79, implying substantial upside from current levels. Late in 2025, heavyweight firms including Morgan Stanley and JPMorgan upgraded their ratings to "Overweight," emphasizing the firm's strategic importance in the supply chain for critical materials.

Forward-Looking Projections and Key Levels

Market experts are projecting a dramatic revenue increase of roughly 124% for the full year 2026, to over $616 million. Earnings per share are forecast to reach $0.74. The next major catalyst for investors will be the release of quarterly results scheduled for late February.

From a technical perspective, the equity must now conquer resistance near the moving averages at $58 and $60 to confirm the sustainability of this nascent breakout. The coming weeks will determine if this impressive rally is the first step in a longer-term recovery.