Forget TMC The Metals Company: This Rare Earth Stock Is the Smarter Bet Right Now

Forget TMC The Metals Company: This Rare Earth Stock Is the Smarter Bet Right Now

Reuben Gregg Brewer, The Motley Fool

Fri, August 7, 2026 at 12:20 AM GMT+3 4 min read

Rare-earth metals are a hot topic on Wall Street and geopolitically. China currently produces the vast majority of rare-earth metals, which are vital components in modern technology. The country has proven it will use access to the materials as a geopolitical bargaining chip. Which is why companies like TMC The Metals Company (NASDAQ: TMC) and MP Materials (NYSE: MP) are of keen interest to investors.

Before you buy into the big story about The Metals Company, however, consider this vitally important fact about rare-earth metals producer MP Materials.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

The Metals Company: A bold plan that is still years away from realization

Rare-earth metals go into everything from cellphones to missile defense systems. The latter products make these materials of importance to ensuring a country's sovereignty. And it helps explain why the governments of the United States and Japan are helping to smooth the way for The Metals Company to develop its business. The problem is that the deep-sea mining operation the company hopes to create isn't actually a thing just yet. It is more of an aspirational goal.

The Metals Company is moving toward that goal, but it is likely years away from actually operating a mine, let alone a profitable one. The story behind the stock is exciting, but it is still just a money-losing start-up with a bold idea and little else. In fact, it doesn't even report income on its income statement; the quarterly report starts with expenses. Only the most aggressive of growth investors should even consider buying this stock.

MP Materials is up and running

Contrast that with MP Materials, which has an operating mine and processing assets. The company's income statement starts with revenue, which has been increasing as operations ramp up. In the first quarter of 2026, revenue rose 49% year over year. In the second quarter, revenue increased 89% compared to the same quarter of 2025.

The bottom line, meanwhile, is positive on an adjusted basis through the first half of 2026. It would be better if GAAP earnings were positive, but MP Materials isn't just a good idea anymore; it is a growing business that has proven it can turn a profit (at least an adjusted one). Notably, the company added a new aerospace and defense customer during the second quarter.

That said, MP Materials isn't exactly a risk-free stock to own. It is still a very young business, while the rare-earth market is still developing. And it is still building out its capabilities. However, its focus on operating in a politically and financially stable region to provide customers with an alternative to China is clearly something the market desires. And being able to sell rare-earth metals right now gives it a leg up on The Metals Company, which basically hopes it can sell rare-earth metals at some point in the future.

Take calculated risks instead of making bets

For investors willing to invest in a developing industry, MP Materials is simply much further along the development curve than The Metals Company. In the end, that will make it a smarter option for most investors seeking out rare-earth exposure today.

Should you buy stock in MP Materials right now?

Before you buy stock in MP Materials, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and MP Materials wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $400,155!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,345,502!*

Now, it's worth noting Stock Advisor's total average return is 955% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of August 6, 2026.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MP Materials. The Motley Fool has a disclosure policy.

Forget TMC The Metals Company: This Rare Earth Stock Is the Smarter Bet Right Now was originally published by The Motley Fool