Washington’s Policy Shift Fuels Optimism for MP Materials

Shares of MP Materials saw a notable surge in early trading, advancing over 5%, following unexpected weekend news from the capital. The catalyst was a report detailing a substantial expansion of the U.S. government's critical minerals strategy by the Trump Administration. Interestingly, the immediate beneficiary of fresh federal funding is a direct competitor, USA Rare Earth, which is set to receive a $1.6 billion investment package. The market's positive reaction, however, underscores a broader interpretation: a clear and powerful political endorsement for the entire domestic rare earths sector.

According to reports, the government plans to acquire a 10% stake in USA Rare Earth. While this action creates a second state-backed player in the long term, investors focused on the confirmation of the industry's paramount strategic importance. The move is seen as further proof that establishing a homegrown supply chain for rare earth elements is a top national priority.

This scenario is familiar for MP Materials. In July 2025, the Department of Defense became its largest shareholder through a similar public-private partnership. The company retains a key advantage as the only commercially operational producer of rare earths in the United States. The latest government investment, therefore, is viewed as validating the strategic landscape in which MP Materials operates, even as it potentially cultivates future rivalry.

Insider Sales Emerge Amidst Political Tailwinds

While policy developments provide a bullish narrative, regulatory filings reveal notable selling activity. Investment firm Baillie Gifford significantly reduced its stake in the third quarter of 2025, cutting its position by approximately 27%. Although the firm retains shares worth about $64 million, the reduction is substantial.

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

Corporate insiders have also been net sellers recently. Over the past 90 days, insider sales have totaled nearly $63 million. This includes a transaction by the Chief Legal Officer on January 20, who sold shares at prices above $68. Such sales, often part of standard compensation plans, can nonetheless temper short-term momentum.

Wall Street Maintains a Constructive Stance

Despite the insider activity, analyst sentiment on Wall Street remains positive. The average price target stands at $78.91, implying a potential upside of around 14% from current levels. Recent commentary from research firms has provided additional support:
* William Blair initiated coverage in January with an "Outperform" rating.
* Morgan Stanley upgraded the stock to "Overweight" in December.
* Bank of America maintains a more ambitious target of $112.

The next significant catalyst is expected on February 19, 2026, when MP Materials reports its fourth-quarter results. Analysts are anticipating a decisive operational turnaround. Forecasts for the 2026 fiscal year project a sharp move into profitability, with earnings per share estimated at $0.72, following an expected loss for 2025.