Demand for rare earth magnets is increasing due to their critical importance in various industries, driven by global electrification and clean energy trends. Rare earth stocks are performing well, with potential for further growth. Two companies, MP Materials Corp. and USA Rare Earth, Inc., are expected to beat earnings estimates this season.

Rare earths are crucial for technology advancement, but mining and processing are challenging. China dominates the market, prompting efforts to build independent supply chains. The U.S. and Australia are investing in critical mineral projects to reduce reliance on China. Neodymium and praseodymium prices are high due to strong demand and supply concerns.

To identify stocks likely to beat earnings, look for a positive Earnings ESP and Zacks Rank #1, 2, or 3. MP Materials Corp. is set to release third-quarter results, with a wider loss expected. The company’s production volumes have been strong, but increased costs may impact earnings. USA Rare Earth Inc. also has potential for an earnings beat.

Zacks’ Research Chief recommends a stock with the potential to double in value. Discover top stock recommendations with significant growth potential. Download Zacks Investment Research for the latest recommendations and insights. MP Materials Corp. and USA Rare Earth Inc. are highlighted as companies to watch for earnings surprises in the third quarter.

Read more at Nasdaq: 2 Rare Earth Stocks Set to Deliver Earnings Beat in Q3