Why Is MP Materials Corp. (MP) Among the Hottest Mid-Cap Stocks So Far in 2025?

We recently compiled a list of the 10 Hottest Mid-Cap Stocks So Far in 2025. In this article, we are going to take a look at where MP Materials Corp. (NYSE:MP) stands against the other mid-cap stocks.

If you’ve been fixated on the usual suspects in the S&P 500, you might be missing out on some solid action. Many mid-cap stocks have been delivering stellar gains in the first few weeks of this month, and there’s a good chance the momentum will stick around.

We believe they’ll prove to be more nimble than the large-cap stocks. It’s worth looking at them because they are comparatively trading at more attractive valuations and they also strike the sweet spot between the stability of large caps and the growth potential of small caps.

The S&P MidCap 400 index has outpaced the S&P 500 index year-to-date. It’s not just a flash in the pan, either. Historically, mid-caps have outperformed both their larger and smaller counterparts in 55% of rolling five-year periods since 1983. As such, it’s worth looking deeper into each top mid-cap performer.

Heavy machinery at work in a mining facility, excavating the earth for rare earth minerals.

MP Materials Corp. (NYSE:MP)

• YTD Performance: 27.8%

MP Materials (NYSE:MP) is a rare earth minerals company and the company operates in the Mountain Pass mine in California (the only integrated rare earth mining and processing site in North America), so it’s got a unique place in the American supply chain.

They reported a net loss for Q2 2024, primarily due to reduced revenue from rare earth concentrates; apparently, they’ve been trying to improve profitability but have faced “challenges” doing so.

Another flashpoint: China’s ban on exporting certain minerals to the United States stirred up extra attention around MP Materials. The company has insisted it’s heavily investing in processing and refining capabilities, presumably so that once demand creeps back up, it can boost future returns.

In my opinion, it is still worth buying. MP stock is undergoing a recovery rally and the stock remains down some 62% from its peak in 2022. If demand starts to bounce back more, so will the stock.

Overall MP ranks 6th on our list of the hottest mid-cap stocks so far in 2025. While we acknowledge the potential of MP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 10 Hottest Mega-Cap Stocks So Far in 2025 and 10 Hottest Large-Cap Stocks So Far in 2025

Disclosure: None. This article is originally published at Insider Monkey.