Highlights

• The Motley Fool article promotes USA Rare Earth over MP Materials based on speculative DoD deals rather than operational fundamentals, crossing from analysis into promotion.
• MP Materials operates as a scaled producer with real DoD partnerships and political relevance, while USA Rare Earth remains pre-revenue with unproven government support.
• Neither company alone solves U.S. China-dependence—domestic refining and magnet manufacturing at scale remain the true bottleneck in rare earth supply chains.

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A recent The Motley Fool article (opens in a new tab) by Thomas Niel urges investors to “forget” MP Materials and instead target USA Rare Earth for greater upside in 2026. The thesis leans on a legitimate macro theme—U.S. urgency to rebuild rare earth supply chains—but the investment logic warrants closer scrutiny.

What the Article Gets Right

The article correctly frames rare earths, particularly NdFeB magnet supply, as strategic assets. China’s dominance remains overwhelming, and U.S. policymakers increasingly treat domestic rare earth capacity as effectively “too big to fail” from a national security standpoint. MP Materials’ scale at Mountain Pass and its existing Department of Defense engagement place it in a structurally advantaged position within that policy framework.

It is also reasonable to note that MP’s roughly 250% share-price appreciation in 2025 reflects forward expectations rather than current earnings strength. Consolidation after such a move is neither unexpected nor inherently bearish.

Where Analysis Slips Into Promotion

The comparison with USA Rare Earth is where rigor weakens. USA Rare Earth remains pre-revenue, has no executed DoD partnership anywhere near the MP scale, and trades primarily on anticipation rather than operating results. The article repeatedly cites a potential DoD deal without evidence beyond management commentary—classic narrative-driven investing.

Projecting a “triple-digit rally” contingent on hypothetical government action crosses from analysis into promotion. Investors should be clear-eyed: no DoD sizable agreement is announced (at least not yet), timelines are undefined, and any rapid scale-up would likely require significant dilution.

Stock Reality Check: Fundamentals vs. Optionality

• MP Materials: A scaled producer moving downstream into magnets. Valuation is demanding and sensitive to China policy cycles, but the asset base and political relevance are real.
• USA Rare Earth: A high-volatility optionality play. Valuation is untethered from cash flow, and upside depends almost entirely on external validation (DoD support, binding offtake), not execution.

The Larger Supply-Chain Blind Spot

The article largely sidesteps the hardest truth: scalable refining and magnets—not mining—are the bottleneck. Without domestic separation, alloying, and magnet manufacturing at scale, neither company alone resolves U.S. dependence on China.

REEx Takeaway for Investors

This is not a binary trade. MP Materials fits the “too big to fail” category—systemically important, politically supported, and from this vantage priced accordingly. USA Rare Earth is a speculative lever on industrial policy.

Key unanswered questions:

• If a DoD deal emerges, on what terms and timeline?
• How much dilution would scaling require?
• Where is guaranteed downstream demand?

Source: Thomas Niel, The Motley Fool, Dec. 24, 2025.

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