Should You Buy This EV Metals Stock That's Up 576% This Year?

Famed oceanographer Jacques Cousteau mused, "The sea, once it casts its spell, holds one in its net of wonder forever." TMC The Metals Company (TMC -1.77%), a deep-sea minerals exploration company, has had a similar effect on investors, soaring 576% this year.

Does this deep-sea treasure hunter belong in your portfolio? Let's take a deeper dive.

Image source: Getty Images.

What lies beneath

Vancouver-based TMC wants to harvest ocean-floor rocks called polymetallic nodules. These prehistoric, potato-size nodules are rich in nickel, cobalt, manganese, and copper, which are considered critical metals for U.S. manufacturing, power generation, infrastructure, and defense.

They're also vital to a lower-carbon future. Nickel, cobalt, and manganese are key ingredients in many electric vehicle (EV) battery chemistries, while copper is critical for EV wiring, motors, charging stations, and even solar panels.

The long list of use cases for these metals shows just how important they are to the U.S. economy. Here are a few examples:

Data source: TMC The Metals Company.

The Department of Energy estimates that over 80% of America's supply of critical minerals -- the raw ingredients for these metals -- comes from foreign sources. Given the heightened geopolitical tensions in the world today, that's a national security concern. But it's also an environmental issue. Land-based mines where these minerals are sourced threaten some of the world's most biodiverse and sensitive ecosystems, such as the rainforests of Indonesia and the Philippines.

TMC has stated that deep-sea mining offers access to critical minerals with far less disruption to sensitive ecosystems, and has promised full transparency into the environmental impacts. However, environmental groups and marine scientists warn that disturbing the ocean floor could pose serious risks to biodiversity, especially in ecosystems that are slow to recover, if they recover at all. As with many emerging technologies, the ecological trade-offs are still being debated -- and TMC's framing should be taken with a grain of salt.

TMC hasn't started mining

TMC The Metals Company holds exploration rights for two large swaths of the Pacific Ocean's Clarion-Clipperton Zone -- a 1.7 million-square-mile abyssal plain between Hawaii and Mexico that's teeming with mineral-rich nodules. However, TMC has no legal authority to begin commercial operations there until the International Seabed Authority (ISA) -- an organization formed by the United Nations to regulate mineral activity on the high seas -- finalizes its long-delayed rules for deep-sea mining.

In the meantime, TMC is hedging its bets. In late April, just days after President Donald Trump signed an executive order aiming to boost domestic access to offshore critical minerals, TMC applied for a mining permit by way of a U.S. law passed in 1980.

The International Seabed Authority oversees mineral mining in the Clarion-Clipperton Zone. However, the United States never ratified the UN treaty that created the ISA, and doesn't formally recognize the agency. So if the Trump administration decides to unilaterally assert America's right to mine in the Pacific, it could provide TMC a faster legal pathway to begin commercial operations -- albeit a controversial one.

Is TMC a buy?

TMC's 576% run-up this year shows just how tricky it can be to value a company with no revenue and no commercial product. In the meme-stock era, valuations can become totally unmoored from business fundamentals. TMC The Metals Company is a prime example.

Like many start-ups, TMC is burning through cash. TMC reported a $20.6 million net loss in Q1 2025, and CEO Gerard Barron recently boasted that the company has invested more than $500 million "in deep-sea science, engineering, and technology to build the world's most advanced deep-sea minerals platform."

The good news is management believes that its liquidity at the end of the first quarter -- $2.3 million in cash and $41.5 million in available credit -- should cover operations through at least May 2026. And the company recently announced an $85 million equity investment from Korea Zinc, one of the world's top non-ferrous metal refiners.

While there's no question that TMC has massive potential, there are big risks as well. Deep-sea mining is an unproven business model. If TMC gets the green light to start harvesting polymetallic nodules in the Pacific, there's no telling if the company can do it profitably.

TMC has laid out some wildly ambitious projections. In a 2021 investor presentation, the company estimated that its flagship NORI-D project in the Clarion-Clipperton Zone would begin commercial production by 2024 and generate nearly $2 billion in EBITDA by 2027, with estimated annual revenue of $4.7 billion from 2030 to 2046. Those numbers are based on a long list of assumptions -- from favorable commodity prices and permitting timelines to full-scale production volumes -- and they haven't been updated since.

Until TMC The Metals Company has a more well-defined path to commercial production -- and can provide more detail on its potential revenue and earnings -- TMC is a highly speculative bet. If you're thinking about starting a position, expect choppy waters for now.