What a year for defense and critical raw materials. China is increasingly using its raw material wealth as a geopolitical weapon. The US, in particular, is responding consistently and pushing Western companies. Tungsten is emerging from the shadow of rare earths due to its strategic importance. Tungsten producer Almonty Industries is commissioning its massive mine in South Korea, and its share price is shooting up by 770%. Even MP Materials cannot keep up. However, it is also valued significantly higher. Will Almonty continue to catch up in 2026? And what is Rheinmetall doing? Growth in 2025 was less strong than expected. Nevertheless, analysts see price potential for Germany’s largest defense contractor in 2026.
Almonty Industries: Will the success story continue in 2026?
What a year for Almonty Industries (TSX:AII). The tungsten producer’s share price soared by around 770% in 2025. There are numerous good reasons for this strong performance – as well as for a continuation of the rally in 2026. With a market capitalization of around USD 2 billion, Almonty does not appear to be overpriced in view of its strategic importance, future profits, and comparable companies such as MP Materials with a market capitalization of almost USD 10 billion.
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One of Almonty’s highlights in 2025 was, of course, the commissioning of the Sangdong tungsten mine in South Korea just a few days ago. The investments made in recent years have paid off, and commercial production can now begin at what is likely the most modern mine of its kind in the world. The first phase of expansion is planned to have an annual production of 640,000 tons of tungsten ore. Within a few years, production is expected to ramp up to 1.2 million tons per year. Revenue and profits should grow accordingly in the future. Especially since the spot price is no longer at USD 200 to 300 per MTU, as it was in the planning phase, but rather at USD 800.
And as early as 2026, Almonty’s third tungsten mine is expected to go into production, alongside its operations in Portugal and South Korea. In the US state of Montana, the country’s first tungsten production in more than 10 years is set to begin in record time. This will make Almonty a driving force in achieving a strategic objective of the US government. By 2027, the US aims to be independent of China for this raw material, which is essential for defense and technology. Against this backdrop, the decision to relocate the Company’s headquarters from Canada to the United States and pursue a NASDAQ listing appears even more plausible.
Accordingly, the interview between Almonty CEO Lewis Black and Lyndsay Malchuk of the IIF was very positive. It also became clear that the Almonty story is far from over.
MP Materials: Buy again after halving?
Similar to Almonty, MP Materials was likely only known to a few investors at the beginning of 2025. This has clearly changed, and the stock has posted a performance of 230%. In retrospect, this is no surprise, as the Company is the only major producer of rare earths in the US.
At the latest, when it became known that the Department of Defense had invested around USD 400 million in the Company, the stock was unstoppable. At the same time, Washington secured long-term supply contracts for the strategically important rare earths. As with tungsten, the US’s clear strategy is to reduce its dependence on Chinese supply chains. The Trump administration is taking a much more consistent approach to this than Europe. It is not only the US government that is backing MP Materials. Apple has entered into a multi-year cooperation agreement to source rare earths for its devices directly from US production in the future. Together with government subsidies, this creates a closed ecosystem – from mining in California to high-tech manufacturing in the US. Within a few months, MP Materials has gone from being a niche producer to a central pillar of a new American raw materials and industrial policy.
However, in their euphoria, investors may have overshot the mark. At its peak, the stock traded above USD 100, giving it a market capitalization of around USD 20 billion. At the beginning of 2025, the price was still around USD 15. A sharp correction set in during Q4, and at the turn of the year, MP Materials’ stock was trading at around USD 50. From Morgan Stanley’s perspective, this means there is potential for the share price to rise again. Analysts recently upgraded the share from “Equal Weight” to “Overweight.” They see the fair value at USD 71. Analysts point out that MP Materials will now also produce permanent magnets, giving it a domestic supply chain from the mine.
Rheinmetall: Analysts confirm “Buy” recommendation
Rheinmetall shares were also among the high flyers of 2025, with a price increase of around 160%. However, this performance is exclusively attributable to developments up to April. Subsequently, shares in Germany’s largest defense contractor rose to EUR 2,000. The slow awarding of major contracts by the German Armed Forces and the possibility of peace in Ukraine meant that the share price ended the year below EUR 1,600.
Shortly before Christmas, analysts at mwb research confirmed their “Buy” recommendation for Rheinmetall shares. The reason for the update was that Rheinmetall confirmed the expected sale of its civilian Power Systems division. However, the growth target for 2025 was also reduced. Instead of the 35 to 40% mentioned on Capital Markets Day, defense-driven revenue growth is now expected to be 30 to 35%. According to the study, the long-term targets for 2030 remain unchanged for the time being. The drivers are economies of scale, higher automation, and a “purer” defense mix.
mwb research is sticking with its “Buy” rating, but is lowering its price target from EUR 2,400 to EUR 2,200. From the analysts’ perspective, this means that there is still considerable upside potential. In their estimates, the sales proceeds for Power Systems are assumed to be EUR 600 million due to the lack of price information. At the same time, KNDS is incorporated into the model for the first time due to stronger competitive visibility, as more information becomes available in the run-up to the planned IPO, making a slightly lower Rheinmetall market share after 2030 appear more plausible. Accordingly, the longer-term revenue assumptions (from 2032 onwards) have been reduced somewhat. Nevertheless, the growth trajectory remains steep in operational terms. Revenues of EUR 12.3 billion are expected for 2025, rising to EUR 22.8 billion in 2027. Earnings per share are then expected to be around EUR 55.
The battle for critical metals will continue to occupy the world and the stock market in 2026. Almonty is entering a new league with the Sangdong mine and is likely to benefit from the determination of the US government. The MP Materials share also has further upside potential. Due to the importance of rare earths, MP Materials is also likely to continue its upward trend. However, the valuation already appears to be quite stretched. For Rheinmetall, it could be a disappointing year. The German government is conspicuously holding back on billion-euro contracts. It would come as no surprise if Europe were to put the brakes on spending once peace is restored in Ukraine. The US is simply more consistent and strategic in this regard.
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