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MP Materials provides rare earth materials used in high-performance magnets for electric vehicles, defense systems, and AI data center infrastructure.
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The company is rapidly scaling the output of rare earth oxides.
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Multiple long-term agreements have ensured high revenue visibility.
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The next market cycle is unlikely to be solely led by artificial intelligence (AI)-powered chips and software stocks alone. Instead, industrial companies that supply strategic materials, expand power availability and grid capacity, and deliver power and thermal management solutions are becoming critical to addressing the real-world constraints in the AI infrastructure buildout.
As investors shift from purely technology-driven narratives to companies that control scarce physical inputs required for AI infrastructure, a few industrial material suppliers could rise to prominence. Here’s why MP Materials (NYSE: MP) fits the bill.
MP Materials has evolved from being a rare earth mining and processing player to a vertically integrated company, encompassing upstream mining and concentrates, midstream separation and refining of rare earth metals (17 metals used to make magnets), and downstream production of high-performance permanent magnets. As the operator of Mountain Pass, the only major rare-earth mining and processing site in the U.S., the company plays a critical role in building a domestic rare-earth supply chain required for the production of high-performance magnets used in electric vehicles, defense systems, and across AI data centers and in semiconductor manufacturing processes.
Neodymium-praseodymium (NdPr) oxide is one of MP Materials’ most prominent and economically significant products, used in high-performance magnets.
In the third quarter, the company’s NdPr oxide production soared 51% year over year to 721 metric tons, while the output of overall rare earth oxides (REOs, including NdPr) reached a record 13,254 metric tons. The company is focused on achieving its goal of 60,000 metric tons of annual output. The rapid expansion of production capacity may lead to further growth in the downstream magnet business.
In July 2025, MP Materials secured a public-private partnership with the U.S. Department of Defense, which includes a 10-year price floor protection agreement (PPA) at $110 per kilogram for NdPr products. Active as of Oct. 1, 2025, this partnership reduces downside risk for the company, while also improving the earnings visibility and predictability of cash flows for NdPr products compared to those of unprotected commodities. Subsequently, the company expects to return to positive earnings per share (EPS) in the fourth quarter, in line with the analysts’ consensus estimate of $0.07.