Key Points

• The Metals Company is developing tech to harvest metal-rich nodules from the ocean floor.

• The company has no revenue and is still awaiting regulatory approval to begin mining.

• A recent U.S. permit application could offer The Metals Company an alternative path forward.

• 10 stocks we like better than TMC The Metals Company ›

Imagine diving into the Pacific Ocean's depths, not to see coral reefs or look for sunken pirate treasure, but to gather metal-dense rocks containing materials that can power the electric vehicle (EV) revolution.

That, in a nutshell, is the bold vision of The Metals Company (NASDAQ: TMC), a Vancouver-based company aiming to vacuum polymetallic nodules from the seafloor. With a stock that had soared 430% in 2025 as of market close July 31, TMC has caught the eyes of investors betting on a future of green energy. But with no revenue, mounting losses, and a sea of risks, is this materials stock worth diving into? Let's explore.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

What does The Metals Company do?

TMC isn't your typical mining stock. The company's core mission is to harvest polymetallic nodules from a remote stretch of Pacific Ocean known as the Clarion Clipperton Zone (CCZ). These lumpy, fist-sized seafloor stones are loaded with nickel, copper, cobalt, and manganese, all essential ingredients in everything from electric vehicle batteries to solar panels.

On land, these rare earth metals are mined and processed in carbon-heavy ways, which ironically undercut the clean-tech future many are destined to be part of. TMC wants to flip the script. Instead of digging holes in the earth, it wants to scoop metal-rich nodules from the seabed and refine them into battery-grade materials, possibly with a lighter environmental footprint.

The potential for TMC's mining operations is huge. As Henry Sanderson points out in his book Volt Rush: The Winners and Losers in the Race to Go Green, the deep sea holds more nickel, cobalt, and possibly other rare earth metals than all the world's land-based reserves combined. The CCZ alone is believed to contain some 21 billion metric tons of nodules -- enough raw material to not only shake China's grip on battery metals but supercharge the EV revolution for decades, if the materials can be gathered and refined.

A big vision, but zero revenue

But let's not sugarcoat it: TMC is nowhere near harvesting nodules at a commercial scale. The company reported zero revenue in the first quarter of 2025, paired with a net loss of about $20.6 million. That loss widened from $16.1 million in the quarter before. It turns out that building an underwater mining infrastructure from scratch isn't going to be cheap.

Or quick. As of writing, TMC still doesn't have the green light to mine commercially in the CCZ. Although it holds exploration rights across two massive patches there, it doesn't yet have permission to start harvesting the goods. That authority rests with the International Seabed Authority (ISA), a United Nations-backed body that still hasn't finalized the regulatory playbook that companies like TMC need to operate.

But there's a plot twist with the ISA: The U.S. never ratified the treaty that made the agency. While 169 nations and the European Union formally recognize the agency's authority, the U.S. isn't one of them. True, it does acknowledge parts of the treaty as international law, but technically, it's not bound by the ISA's rulebook. This means that if national interest comes into play -- say, securing domestic access to critical minerals -- the U.S. could try to go its own way. That would give companies like TMC a potential fast track to start operating in the CCZ.

This is exactly the door that TMC is trying to walk through. In April 2025, the company filed a permit application under a decades-old U.S. law just days after President Donald Trump signed a U.S. executive order renewing interest in offshore critical minerals. If TMC's application is approved, it could mean mining under American jurisdiction in waters considered off-limits to the rest of the world. It's a long shot, legally speaking, and could breach international norms, but it would be a major breakthrough for a company with no revenue.

A long-term wager with caveats

TMC is what I'd call a moonshot (or, maybe a deep-sea Hail Mary) -- it's a big idea with big risks and potentially big payoffs. If the permits come through and the tech scales, today's price could look like a bargain. After all, a $2.65 billion market cap could look small compared to the multitrillion-dollar demand for battery metals that's expected over the next few decades. If TMC becomes even a minor supplier in that chain, its top-line growth could dwarf what investors are paying today.

But if the ISA blocks its permit, or if U.S. jurisdiction doesn't hold up to legal scrutiny, or if other things turn out in ways not the best for the company, TMC could keep burning cash with no clear path to revenue.

That's a lot of "ifs." Clearly, this isn't a stock for the risk-averse. For aggressive investors with long-term horizons, a small stake might make sense as part of a diversified portfolio. But I would wait for tangible progress, like a confirmed mining license, before scaling up exposure.

Should you invest $1,000 in TMC The Metals Company right now?

Before you buy stock in TMC The Metals Company, 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 TMC The Metals Company 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 $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,064,820!*

Now, it’s worth noting Stock Advisor’s total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 29, 2025

Steven Porrello has positions in TMC The Metals Company. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Key Points

• NRG Energy's utility makeover and strategic acquisitions fuel 2025 gains yet derivatives risks remain.

• Palantir's AI software boom has delivered stunning profits but carries a sky-high valuation.

• 10 stocks we like better than Palantir Technologies ›

As the S&P 500 moves more cautiously in 2025, two companies have distinguished themselves with impressive gains. Palantir (NASDAQ: PLTR), up over 90% on surging AI adoption, and NRG Energy (NYSE: NRG), up roughly 60% (at the time of writing), now sit atop the index as two of its best performers. Both have delivered blockbuster returns, punched above consensus earnings, and unfurled sails to catch the AI tailwinds. But as we head into the back half of 2025, when markets often test even the hottest stories, which of these high-flyers has more juice in the tank?

Let's pull back the curtain and see.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

NRG Energy: Old-school power, modern makeover

NRG's old-school power plants are firing on all cylinders. In Q1, revenue jumped 15% to $8.6 billion -- well above the 10% rise across the utility sector -- as wholesale power prices spiked and retail margins widened. Net income popped 47% to $750 million, and earnings per share (EPS) jumped 83.6% from $1.46 to $2.68, more than triple utility peer Duke Energy's own 22% gain. That kind of upside doesn't come around often in utilities, as the chart below shows.

All of that growth is certainly impressive. But a closer look at its business model may hint at some hidden risks. As the Wall Street Journal recently pointed out, only about 9 % of NRG's $25 billion in assets sits in actual power plants, while a staggering 21% lives in $5.2 billion of commodity derivatives. That's high, especially when you consider that many members of the Philadelphia Utility Sector Index hold under 1% of their net assets in derivatives . While NRG is likely using them to hedge energy prices, the heavy exposure could lead to a painful loss on the bottom line if price moves exceed the company's hedged positions.

But here's an interesting fact: NRG has recently agreed to buy a portfolio of natural gas generation facilities and a virtual-power-plant platform from LS Power for $12 billion. Once closed, the deal will more than double NRG's hard-asset base, which should dilute its derivatives line with physical plants. It won't erase volatility all at once, but it will help move NRG back toward a classic utility profile.

Looking ahead, NRG's transformative $12 billion acquisition could help it capture surging electricity demands from AI data centers, which explains why management is expecting a 14% compound annual EPS growth rate over the next five years . That kind of growth will also support its dividend, which is currently at 1.15%. With new capacity on the horizon and dividends set to climb, there's real upside if the LS integration runs smoothly.

Inside Palantir's AI cash machine

Like NRG, Palantir is riding the AI wave. But while NRG is selling energy that powers data centers, Palantir is selling powerful software that turns that data into battlefield tactics and boardroom decisions.

In Q1, Palantir cranked total revenue up by 39% to $884 million, powered by a 55% leap in U.S. sales and a 71% explosion in commercial contracts. This marks the highest quarterly revenue growth on record and its strongest Q1 growth in four years. The same momentum delivered a blistering 44% adjusted operating margin -- nearly double the roughly 23% operating margin for the tech sector -- and $370 million in free cash flow.

PLTR data by YCharts

Government work still underpins the base, but enterprise bookings now outpace defense deals, with 139 contracts north of $1 million inked this quarter alone. This shift toward enterprise, which close faster, scale more predictably, and carry more recurring revenue, signals that Palantir is building a more stable, higher-margin business less reliant on the ebb and flow of government spending.

While the headlines for Palantir have been growth, growth, growth, its valuation is a bit sobering. Palantir's stock has a forward price-to-earnings ratio (P/E) exceeding 230, about eight times the tech sector's at 29, making it one of the more richly valued stocks you'll find. The premium baked into that price demands near perfect performance every quarter. Miss one large contract or see a competitor undercut pricing, and the valuation could hit a speed bump.

At the same time, AI's incoming tidal wave could add about $15.7 trillion to the global economy by 2030, more than the combined GDP of China and India. Palantir is already at the epicenter, with management forecasting $3.9 billion in full-year 2025 revenue, a 36% improvement from last year. For long-term investors, the only risk is that today's price already bakes in the expected AI boom, leaving scant room for upside.

So: power or data?

This is really a tough call. But if I had to pick just one, I'd go with NRG. On a price-to-earnings basis, NRG's roughly 20 times forward multiple is only a notch above the S&P 500 Utilities Index's norm of 18 times -- hardly egregious for a utility that's reinventing itself for an AI-powered world. And with the LS Power acquisition in the works, NRG seems primed for durable upside without nail-biting risk.

But don't get me wrong. I love what Palantir has done over the last half decade. But that high valuation – yikes. If you can stomach that valuation, Palantir could still spark fireworks. But if you want more upside, NRG might be the safer charge.

Should you invest $1,000 in Palantir Technologies right now?

Before you buy stock in Palantir Technologies, 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 Palantir Technologies 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 $680,559!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,005,670!*

Now, it’s worth noting Stock Advisor’s total average return is 1,053% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

Steven Porrello has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.