IperionX (ASX:IPX) Surges 8% on US Army Contract – Is Now the Time to Buy?

Titanium supply chain story gains momentum

IperionX (ASX: IPX) jumped 8 per cent last week after winning a US$0.3 million prototype order from American Rheinmetall. The deal covers 700 lightweight titanium parts for U.S. Army heavy ground combat vehicles. For investors watching the critical minerals space, this contract marks another step in the company’s push to become America’s only domestic titanium producer at commercial scale. The key question is whether growing government support justifies a valuation that has attracted both bulls and short sellers.

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IperionX Builds America’s Only Domestic Titanium Supply Chain

What makes IperionX stand out is simple: it is the only company producing titanium metal at a commercial scale entirely within the United States. The company uses two patented technologies called HAMR and HSPT to turn recycled titanium scrap into high-quality metal. This matters because the U.S. currently depends heavily on foreign suppliers for this critical defence material.

The real-world benefits are easy to understand. Swapping steel parts for IperionX’s titanium cuts weight by 40 to 45 per cent. For military vehicles, that means faster acceleration, longer range, and better protection for soldiers. These are exactly the outcomes the Pentagon is willing to pay for.

Government Support Validates the Technology

U.S. Department of War (DoW) backing has been strong and growing. Earlier this month, the company received the final US$4.6 million from its US$47.1 million defence department award. The government also transferred 290 metric tons of titanium scrap to IperionX at no cost, enough feedstock for approximately 1.5 years of production at its 200 metric ton per year capacity.

The company holds a US$99 million contract that allows government agencies to buy directly from IperionX without competitive bidding. This sole-source pathway gives the company a clear advantage when defence buyers need American-made titanium quickly. Production capacity is set to scale from 200 metric tons per year to around 1,400 metric tons by mid-2027.

The Investor’s Takeaway

The bull case is straightforward. IperionX sits at the centre of America’s push to bring critical supply chains home. Government funding validates the technology, and the scale-up pathway is fully funded. If the company converts its pipeline of more than 200 potential opportunities into commercial contracts, early investors could see significant upside.

However, the valuation demands a reality check. IperionX trades at roughly US$1.65 billion despite generating minimal revenue today. The stock trades at roughly 17 times book value, compared to around 2 times for typical speciality metals peers. While IperionX highlighted its US$79 million cash balance and US$43 million in committed government funding, the current share price clearly assumes a lot of future success.

The key risks come down to execution. Expected commercial contracts, including a US$11 million Ford deal, have not yet appeared in revenue figures. The Titan Critical Minerals Project in Tennessee still needs project financing, with key studies due by mid-2026.

We believe IperionX holds a genuinely strategic position in a growing market. For risk-tolerant investors with a multi-year horizon, this stock offers real exposure to U.S. defence spending and American manufacturing. However, the current price assumes near-perfect execution. Conservative investors should wait for pullbacks or proof of commercial revenue before buying. Those already holding may want to keep their position but avoid adding until the company turns government support into real profits.