MP Materials (MP) stock underwent a massive rally on Thursday after the Department of Defense made a major investment in the rare earth materials company. This will have the government agency acquire $400 million in preferred shares of the company’s stock, as well as warrants to acquire additional shares. The preferred shares can also be converted into MP stock.
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The Department of Defense will invest in MP Materials to accelerate the creation of a rare earth magnet supply chain. Government interest in MP Materials came alongside plans to reduce reliance on foreign suppliers. It makes sense that the Department of Defense would turn to the company for this, as it operates the only rare earth mine in the U.S.
James Litinsky, Founder, Chairman, and CEO of MP Materials, said, “This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence.” The company leader also thanked the Trump administration, shareholders, and others for their “unwavering support and dedication.”
MP Materials Stock Movement Today
News of the deal with the Department of Defense had MP Materials investors excited today. This sent shares of MP stock 52.55% higher on Thursday, extending its 204.36% year-to-date rally. The stock has also gained 101.81% over the past 12 months.
Additionally, today’s news brought with it increased trading of MP stock. This had some 28 million shares traded as of this writing, compared to a three-month daily average of about 11.16 million units, which implied increased investor buying.
Is MP Materials Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for MP Materials is Moderate Buy, based on six Buy and three Hold ratings over the past three months. With that comes an average MP stock price target of $30.13, representing a potential 35.23% downside for the shares.
