Strategic Alliances with Pentagon and Apple Propel MP Materials to New Heights

MP Materials is undergoing a fundamental strategic transformation, driven by landmark agreements with the U.S. Department of Defense and technology behemoth Apple. These partnerships are elevating the rare earths producer to a new level of operational and strategic importance.

Robust Operational Performance Sets the Stage

The company’s recent strategic moves are underpinned by exceptionally strong operational results. Its second-quarter 2025 financial report demonstrated significant growth across key metrics:

• NdPr Output: Achieved a record 597 tons, representing a 119% surge compared to the prior-year period.
• REO Production: Posted its second-best quarterly performance with 13,145 tons, a 45% year-over-year increase.
• Revenue Growth: Sales climbed 84% to reach $57.4 million.

This operational excellence provided the foundation for a pivotal strategic shift made in April 2025: the complete cessation of all rare earth concentrate shipments to China, a decisive move to break away from reliance on the Asian nation.

Defense Department Deal: A Billion-Dollar Partnership with Price Assurance

A transformative public-private partnership has been established between MP Materials and the Pentagon to construct a fully domestic supply chain for rare earth magnets. This multi-billion dollar arrangement positions the Department of Defense as the company’s largest shareholder following an initial $400 million investment in convertible preferred stock.

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

A central component of the agreement is a 10-year price guarantee from the Defense Department, ensuring a minimum of $110 per kilogram for MP Materials’ neodymium-praseodymium (NdPr) products. This measure shields the company from non-market forces and secures predictable long-term cash flows. The collaboration will fund the construction of a new “10X Facility” dedicated to magnet manufacturing, which is anticipated to be operational by 2028.

Apple Secures Supply with $500 Million Recycling Agreement

Further solidifying its market position, MP Materials entered into a definitive long-term supply agreement with Apple valued at $500 million. Under the terms of the deal, MP Materials will supply rare earth magnets manufactured from 100% recycled materials for use in Apple products. Initial deliveries are projected to commence in 2027, with plans to scale production to support hundreds of millions of devices.

Analysts Respond with Significant Upgrades

These groundbreaking developments triggered a substantial reassessment among market analysts. In June 2025, Morgan Stanley upgraded the company’s stock from “Equal-Weight” to “Overweight,” simultaneously raising its price target to $34. The momentum continued in September when DA Davidson followed suit, dramatically increasing its price objective to $82. This bullish revision was primarily driven by the strategic significance of the Pentagon agreement and the company’s impressive second-quarter operational performance.