| AI Superintelligence: What I Just Saw in Taiwan Shocked Me |
With China’s tight control over rare earths, and U.S. demand soaring, rare earth stocks are again center stage. In fact, nowadays, China wants to prevent the U.S. military from getting its rare earth supply.
And, as noted by CNBC, “Beijing will not allow the export of rare earth materials for use by foreign militaries, China’s Ministry of Commerce announced on Oct. 9. These are the first restrictions imposed by China that specifically target the defense sector, according to Gracelin Baskaran, a critical minerals expert at the Center for Strategic and International Studies.”
As a result, one U.S. stock in particular has been exploding in potential.
That company is MP Materials (SYM: MP).
And it’s been explosive.
Since bottoming out at around $20 in late May, MP rallied to a high of $100.25. Now back to $56.68 with the overall market pullback, we’d use the drop as a buying opportunity.
For one, it operates the Mountain Pass mine in California.
Two, the U.S. Department of Defense announced it was buying $400 million worth of MP’s preferred stock – positioning itself as the company’s biggest shareholder. And three, MP signed a $500 million deal with Apple, which agreed to buy rare earth magnets from it.
In addition, analysts see the stock rallying even higher.
Deutsche Bank, for example, raised its price target to $71 with a buy rating. The firm also said MP was finally “trading on the fundamental value,” and now represents a good entry point for investors looking to gain exposure to a great company, in a great thematic, in a great sector here in the U.S.,” as quoted by CNBC.
JPMorgan believes MP is set to benefit from supply-demand issues, too. The firm also upgraded the miner to an overweight rating with a price target of $74 a share.
“Our new rating reflects our view that rare earths national security concerns are ‘here to stay’ despite China’s reported one-year pause on export restrictions, with risks remaining, especially for military exposure,” they said, as quoted by CNBC.
“MP’s unique mine-to-magnet vertical integration positions the company as the ex-China leader ready to immediately begin addressing these concerns, although it will ultimately take multiple players over many years to sort out.”
In short, investors may want to use MP Materials’ weakness as a buy opportunity.
With growing demand for supply, there’s plenty of upside potential here – especially with China’s consistent rare earth stronghold.
Trending Now: Season of Surge for these three stocks
BLACK FRIDAY STOCK ALERT