CANADA – 2025/09/18: In this photo illustration, the First Majestic Silver Corp. logo is seen displayed on a smartphone screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
In the past year, few stocks have captured market attention quite like First Majestic Silver (NYSE: AG). Transitioning from obscurity in the wider commodity markets to standing out as one of the top performers among precious metals miners, First Majestic’s share price has experienced remarkable growth—rising almost 4x over the past year, from approximately $5.09 at its 52-week low to as high as $22 recently. What accounts for this fourfold rise? To grasp the rally, one must consider a potent mix of operational successes, market influences, strategic acquisitions, and investor sentiment.
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Silver Prices and a Bull Market Tailwind
Integral to First Majestic’s comeback is the backdrop of an extraordinarily robust silver market. Global silver prices have surged notably, driven by a combination of limited physical supplies, increasing industrial demand—especially in solar technology—and renewed interest from investors in precious metals. In 2025 alone, silver futures skyrocketed by more than 130%, significantly outperforming many other commodities. Mining companies like First Majestic gain disproportionately from such fluctuations, as elevated metal prices frequently lead directly to enhanced revenues and profitability without a comparable rise in production costs.
Record Production and Operational Expansion
While the rise in silver prices provided a beneficial macro backdrop, First Majestic excelled operationally in ways that few investors anticipated. In 2025, the company achieved a record production of 31.1 million silver equivalent ounces, including 15.4 million ounces of actual silver, marking an 84% increase over 2024. In the fourth quarter alone, the total attributable silver equivalent production reached 7.8 million ounces, with silver output increasing by 77% year-over-year to 4.2 million ounces—both remarkable milestones and clear indicators that production capacity has expanded significantly.
These results were not achieved by chance. A significant factor was the January 2025 acquisition of a 70% stake in the high-grade Cerro Los Gatos Silver Mine in Chihuahua, Mexico, through the purchase of Gatos Silver. This transaction introduced a long-term, high-quality asset into First Majestic’s portfolio and substantially increased consolidated output. Coupled with production gains at major assets such as San Dimas, Santa Elena, and La Encantada, the company fundamentally altered its production profile within just one year.
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Financial Turnaround and Strengthening Balance Sheet
While production growth alone does not guarantee a stock rally, the resulting financial implications have been hard to overlook. First Majestic’s increased output has coincided with a marked shift toward profitability. Enhanced operational performance, combined with higher metal prices, has led to record revenues and strengthened cash flows. Investment analyses indicate that revenues have surged dramatically—almost doubling in the past year—while cash costs per silver equivalent ounce have remained competitive, thereby improving margins and free cash flow.
The company also reported one of its strongest liquidity positions ever, with cash and restricted cash balances reaching historic highs in quarters like Q1 2025, alongside persistent strength in working capital. This financial flexibility equips First Majestic with the resources needed to fund further expansion, exploration, and shareholder returns, including an increased dividend that will rise to 2% of net quarterly revenue starting in 2026.
What Could Come Next?
As we look forward, the factors that have propelled First Majestic’s growth may continue to unfold—but not without associated risks and cautions. On the positive side, silver prices remain a key lever for potential continued gains. Should industrial demand keep advancing—particularly for renewable energy technologies like photovoltaic cells that utilize significant amounts of silver per unit—price support could persist, enhancing both revenues and margins for producers. Successful ongoing integration of assets like Los Gatos and new discoveries—such as the high-grade vein results at Santa Elena—would significantly prolong mine life and production growth.
However, valuations may be stretched compared to historical standards. Elevated price-to-sales ratios and premium multiples relative to the mining sector indicate that investors are anticipating ongoing strong performance; if metal prices stabilize or production growth per share slows, those premiums could diminish. Furthermore, silver mining is inherently cyclical, and cost pressures, equipment downtime, or regulatory challenges in Mexico may hinder future earnings.
In conclusion, First Majestic Silver’s stock has soared almost fourfold over the past year due to a compelling blend of record production, strategic acquisitions, strong commodity prices, and evolving market sentiment. Whether the next chapter involves continuity or consolidation will depend on both macro metal markets and the company’s execution of its ambitious production and exploration strategies.
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