The stock of MP Materials (MP) has hit an all-time high a day after consumer electronics giant Apple (AAPL) disclosed plans to invest $500 million in the operator of the only rare earths mine in America.
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MP stock hit a record high of $62.87 a share in intraday trading on July 16 and was on pace to close at an all-time high as well. The share price is now up 271% this year, having gained more than 25% since news of the Apple investment was made public.
The move by Apple comes a week after MP Materials agreed to a multibillion-dollar deal with the U.S. government to boost output of rare earth magnets, metals and minerals and help lessen America’s dependence on China for those elements. Rare earth magnets, metals and minerals are used to build weapons, electric vehicles (EVs), and electronics such as the smartphones and tablets made by Apple.
More Investments Ahead?
Some analysts and investors are speculating that MP Materials might attract additional investments from other technology companies in the coming weeks and months. Media reports say that the agreement with Apple includes plans for the consumer electronics company to purchase U.S.-made rare earth magnets from MP Materials’ Texas facility.
There are also reportedly plans for Apple and MP Materials to build another factory in Fort Worth, Texas to produce magnets and a new recycling facility in California. MP Materials’ deal with the U.S. Department of Defense includes a price floor for rare earths, designed to spur investment in domestic mines and processing plants.
China remains the world’s largest producer of rare earth materials, controlling 69% of global production.
Is MP Stock a Buy?
The stock of MP Materials has a consensus Strong Buy rating among eight Wall Street analysts. That rating is based on six Buy and two Hold recommendations issued in the last three months. The average MP price target of $43.17 implies 4.30% downside from current levels.
