What Has Driven First Majestic’s 2X Surge?

First Majestic Silver (NYSE: AG), one of the most leveraged publicly traded plays on silver, has delivered a powerful comeback in 2025. The stock now trades at $17 – more than doubling over the past six months as silver prices surged and investor appetite returned to precious-metal equities. After such a rapid rally, the key question facing investors is whether this move still has room to run—or whether much of the upside is already priced in. Let’s break down the thesis.

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Core Thesis: What’s Driving the Rally

Silver Price Momentum and Operating Leverage

First Majestic’s recent surge is primarily a function of silver itself. As a high-beta silver producer, the company has historically shown outsized moves when silver prices trend higher. Over the last six months, silver has benefited from a weaker dollar backdrop, rising geopolitical uncertainty, and accelerating industrial demand from solar, electrification, and energy-transition technologies. These dynamics have pushed realized pricing higher, directly boosting revenue expectations for silver-heavy miners like First Majestic.

From a fundamentals perspective, the company has moved past a period marked by cost inflation and operational headwinds. Production levels have stabilized, and management’s focus on cost discipline has improved margin visibility. With operating leverage now working in its favor, incremental gains in silver prices translate disproportionately into cash flow, which helps explain why the stock has risen more than 2x in such a short period.

Valuation: Is the Stock Still Cheap at $17?

After doubling in six months, First Majestic no longer trades at distressed valuations. However, relative to prior silver bull cycles, the stock is not obviously expensive if silver prices remain elevated. In previous periods when silver sustained higher trading ranges, First Majestic commanded meaningfully higher multiples of cash flow and net asset value than it does today.

If silver prices continue to grind higher or even consolidate near current levels, the company’s earnings power could expand further, justifying today’s valuation and potentially supporting additional upside. In that scenario, the stock’s recent rally would look less like a speculative spike and more like a re-rating tied to a structurally stronger silver market.

What Could Drive the Next Leg Higher

Continued strength in silver prices remains the single most important catalyst. Any breakout in silver driven by inflation concerns, rate cuts, or a renewed surge in industrial demand would likely reignite momentum in high-beta miners. Operational consistency is another key factor. If First Majestic continues to deliver steady production and disciplined cost control, investor confidence in the sustainability of cash flows should improve.

Exploration upside also adds optionality. While not the primary driver of the recent rally, success on the exploration front could enhance long-term value and reinforce the company’s positioning as a pure-play silver producer.

Risks After a 2x Move

After such a sharp run, volatility risk is elevated. Silver equities are known for sharp pullbacks even within broader uptrends, and any correction in silver prices could quickly pressure the stock. Cost inflation, operational disruptions, or regulatory issues in Mexico remain ongoing risks that could cap near-term upside.

There is also the risk that expectations have moved too far, too fast. With the stock already up more than 100% in six months, incremental gains will likely require either higher silver prices or consistently strong financial results.

The Verdict

At $17, First Majestic Silver is no longer a turnaround story—it is a momentum-driven, high-beta play on silver prices. The stock’s more-than-2x rally reflects a powerful shift in sentiment toward precious metals and improving confidence in the company’s operating leverage. Further upside is possible if silver prices remain strong or push higher, but the risk-reward is now more balanced than it was six months ago.

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