Freeport-McMoRan Inc. (FCX) | The Buildout — AI Infrastructure
The Verdict
Freeport-McMoRan mines and processes copper, with gold, molybdenum, and silver riding along as byproducts. Its copper concentrate, cathode, and continuous-cast rod sit upstream of transformers, switchgear, busbars, cabling, and grid equipment that AI data centers and related energy infrastructure depend on.
| Market Cap | — |
| Revenue (TTM) | $25.9B |
| Revenue Growth | +0.7% |
| EBITDA Margin (TTM) | 35.0% |
| Net Debt | $6.3B |
| Earnings Beats | 6 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- U.S. Mining is the portfolio's highest earnings contributor; H1 2026 operating income was 2.4x the year-ago half.
- Morenci's Q2 mining rate was roughly 900,000 tons/day, about 30% above the prior five-year average.
- Grasberg Block Cave ended June at 69,000 tpd, double April's 34,000 tpd, with H2 planned at 60,000–65,000 tpd.
- Leach initiative targets 300–400M lb/year in 2026–27 and a path to 800M lb/year by as soon as 2030 from 40B+ lb stockpiles.
- Bagdad would more than double production and become the second-largest U.S. copper mine behind Morenci; management sees no major permitting hurdles.
What We’re Watching
- Grasberg H2 2026 is deliberately constrained by scheduled chute-gallery work; any slip in chute-regulator installation would pressure volumes.
- Bagdad preliminary capital is ~$4.5B, about 30% above the 2023 estimate, with a final decision targeted H2 2026.
- The U.S. $2.50/lb cost target is not achievable in 2027 under current markets, per management.
- The new Indonesian smelter ramp schedule is back-loaded: Q3 production is expected to be significantly above sales, with the sales catch-up in Q4.
Thesis is strengthening: the U.S. segment is now leading earnings, Grasberg is progressing on the revised ramp, and management's tone has shifted from incident response to execution. The key open question is whether the large U.S. growth projects stay on schedule and on budget as Bagdad moves toward a final decision.
Earnings Beat
In the June 2026 quarter, revenue was $7,029 million and gross margin was 31.1%; net income was $984 million. Grasberg Block Cave exited June at 69,000 tons per day, double the April average of 34,000 tons per day.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $7.0B | $6.2B | $7.6B | −7.3% |
| Gross margin | 31.1% | 26.5% | 34.1% | -300bps |
| EBITDA | $2.5B | $2.7B | $3.1B | −18.5% |
| EPS | $0.68 | $0.61 | $0.53 | +27.5% |
| Grasberg Block Cave avg. tpd | 69,000 (June average) | 34,000 (April average) | n/a | — |
it is not something with current markets that we can achieve in 27.— Kathleen Quirk, Q2 2026 earnings call, July 23, 2026
Management tone: Management's tone shifted from incident response in April to execution and de-risking in July, opening the Q2 call with the word 'Progress.' The Q1 call was dominated by the Grasberg wet-ore material-handling bottleneck; the Q2 call emphasized Grasberg ramp execution, U.S. earnings strength, and Indonesia extension paperwork.
Management Guidance
Management's 2026 guidance is for consolidated copper sales of about 3.1 billion pounds, gold sales of 650 thousand ounces, and molybdenum sales of 90 million pounds; unit net cash cost was lowered to $1.90/lb from the April estimate of $1.95/lb on higher byproduct credits. Capital expenditures are held at about $4.3 billion for 2026, while 2027 capex was raised to $4.8 billion. Management expects H2 2026 copper sales to be more than 20% above H1 and 2027 copper sales likewise more than 20% above 2026.
Trajectory
Revenue rose 12.8% quarter over quarter in Q2 2026, the second straight sequential increase after a 10.7% gain in Q1 2026. Gross margin expanded while EBITDA margin compressed 110 basis points, reflecting cost pressure and Grasberg idle/restoration charges. Management reaffirmed that H2 2026 copper sales should be more than 20% above H1 and that 2027 copper sales should be more than 20% above 2026.
The Model
The model projects FY+1 revenue of $29,400 million and EBITDA of $11,084 million, a 37.7% margin, rising to FY+2 revenue of $34,500 million and EBITDA of $15,974 million, a 46.3% margin. The near-term projection is anchored by the Grasberg ramp and rising U.S. mining rates; the FY+2 step-up reflects management's projected 2027 volume growth and the scaling leach initiative.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $25.7B | $30.8B | $38.8B |
| YoY Growth | — | +19.7% | +26.0% |
| EBITDA | $8.5B | $12.8B | $17.8B |
| EBITDA Margin | 33.2% | 41.6% | 45.8% |
Projections are the median of 5 independent model runs. The model’s revenue sits 12.2% above analyst consensus.
Management's 2026 guidance is for consolidated copper sales of about 3.1 billion pounds, gold sales of 650 thousand ounces, and molybdenum sales of 90 million pounds; unit net cash cost was lowered to $1.90/lb from the April estimate of $1.95/lb on higher byproduct credits. Capital expenditures are held at about $4.3 billion for 2026, while 2027 capex was raised to $4.8 billion. Management expects H2 2026 copper sales to be more than 20% above H1 and 2027 copper sales likewise more than 20% above 2026.
What Could Go Right — and Wrong
- Grasberg CG44 completion by end-2026 delivers the expected 25,000–30,000 tpd step-change and keeps the district on track for full capacity by end-2027.
- Leach run-rate reaches 300 million pounds by end-2026 and progresses toward the 800 million-pound path by as soon as 2030.
- Bagdad wins board approval in H2 2026, starting a 3–4 year build that could more than double production and create the second-largest U.S. copper mine.
- El Abra's environmental review succeeds, clearing a potential addition of over 700 million pounds of copper production per year.
- Indonesia completes the rights extension, converting the February MOU and June application into life-of-resource operating rights.
- Grasberg chute-regulator installation slips, pushing H2 2026 below the 60,000–65,000 tpd plan and deepening 2028 grade/sequencing reductions.
- Bagdad's board decision slips beyond H2 2026 or capital escalates further above the ~$4.5 billion preliminary estimate.
- Gold and molybdenum byproduct prices fall, removing the credits that let 2026 unit cost guidance improve to $1.90/lb.
- Indonesia rights extension drags on, delaying life-of-resource operating rights.
Looking Ahead
The next twelve months are built around the Bagdad final investment decision in H2 2026, Grasberg CG44 completion by the end of 2026, the leach run-rate target of 300 million pounds by end-2026, and the pending Indonesia rights extension. In 2027, the Grasberg PB1 South restart and the district's approach to full capacity should show whether the reset ramp is durable.
- Q3 2026New smelter concentrate shipments — Concentrate shipments begin; Q3 production significantly above sales until Q4 catch-up.
- H2 2026Bagdad final investment decision — Board decision on ~$4.5B expansion to more than double production.
- End-2026Grasberg CG44 completion — Expected 25–30k tpd production step-change from chute-gallery work.
- End-2026Leach 300M lb run-rate — Company targets roughly 300M lb/year run-rate by end-2026.
- 2026Indonesia rights extension — Formal license issuance targeted this year; no prescribed deadline.
- 2027Grasberg PB1 South restart — Volume step; district approaches full capacity by end-2027.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $25.1B | $25.7B | $25.9B | +2.4% |
| Gross Margin | 28.5% | 26.2% | 26.8% | 235bps |
| EBITDA | $8.8B | $8.5B | $69.7B | -2.9% |
| EBITDA Margin | 35.0% | 33.2% | 35.0% | 181bps |
| Net Income | $1.9B | $2.2B | $2.9B | +17.4% |
| Free Cash Flow | $2.4B | $5.6B | $25.3B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)26.8%
- EBITDA Margin (TTM)35.0%
- Net Margin (TTM)11.4%
- ROIC20.7%
- FCF Conversion65.4%
- SBC / Revenue0.6%
The Company
Freeport-McMoRan is one of the world's largest publicly traded copper producers, headquartered in Phoenix, Arizona, with the stated objective of being foremost in copper. Copper is the core product: 2025 consolidated revenues were 75% copper, 15% gold, and 8% molybdenum. Mined copper was sold as 43% concentrate, 33% cathode, and 24% rod.
The company operates across three segments: seven U.S. copper operations plus two molybdenum mines; Cerro Verde in Peru and El Abra in Chile; and the Grasberg minerals district in Indonesia through PTFI, in which the Government of Indonesia owns 51%. It also runs U.S. rod and refining, Atlantic Copper, and PT Smelting, a 66%-owned Indonesian smelter and refinery joint venture with Mitsubishi Materials.
Business Segments
Competitive Landscape
FCX describes itself as one of the world's largest publicly traded copper producers and as 'America's Copper Champion.' The product is commodity copper, so the competitive focus is on reserves, costs, and project execution. The supplied source set does not document any direct competitor names; downstream electrical, HVAC, and cable companies appear only as inferred ecosystem neighbors rather than confirmed counterparties.
Supply Chain
FCX sits upstream in the physical AI-infrastructure buildout, producing copper concentrate, cathode, and continuous-cast rod that flow into transformers, switchgear, busbars, cabling, and grid equipment. No downstream neighbor in the supplied calls mentions FCX by name.
More on FCX: Earnings recap