Here's Why USA Rare Earth Stock Rocketed 81% Higher in the First Half of 2026

Underperforming the S&P 500, shares of USA Rare Earth (NASDAQ: USAR) inched 3.7% higher in 2025, while the index rose 16.4%. The first half of 2026, however, featured a very different story. According to data provided by S&P Global Market Intelligence, shares of USA Rare Earth soared 81.3% through the first six months of 2026.

With analysts consistently providing bullish outlooks on the stock and the rare-earth company reporting progress toward commencing commercial operations, investors found sufficient cause to click the buy button over the past several months.

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Digging into the sources of this mining stock's rise

It didn't take long after the ball dropped before investors started bidding USA Rare Earth stock higher. Shares rose more than 88% in January after the company announced a partnership with the French government to develop a metal and alloy production facility in France that management expects to commence operations in late 2026.

Reporting progress toward the start of domestic operations, USA Rare Earth announced in late January that it had selected Fluor to assist with its Definitive Feasibility Study for the company's cornerstone Round Top Rare Earth Project in Texas. Plus, the company announced that it had signed a non-binding Letter of Intent with the U.S. Department of Commerce and entered into a collaboration with the U.S. Department of Energy, totaling about $1.6 billion in federal funding. In addition, the company announced $1.5 billion in private funding provided by Inflection Point.

Analysts also espoused a more bullish outlook on USA Rare Earth stock in the early part of the new year. On Jan. 26, Roth Capital hiked its price target to $35 from $25, and the following day, Benchmark boosted its price target to 45 from $15.

Despite a strong start to the year, shares dipped in February and March. But the decline didn't persist. In April, USA Rare Earth stock headed higher after the company reported that its subsidiary had poured commercial-grade yttrium (a rare-earth metal) at its facility in the United Kingdom. The company lauded the achievement, characterizing it as a milestone that sets it apart as one of the few companies to do so outside China.

Another catalyst for the stock's rise in April was the company's announcement that it had entered into a definitive agreement to acquire Serra Verde Group, a large-scale producer of all four magnetic rare-earths, including the valuable heavy rare-earth dysprosium, terbium, and yttrium, for about $2.8 billion. According to USA Rare Earth management, the acquisition will de-risk the company as Serra Verde is expected to achieve annualized run rate earnings before interest, taxes, depreciation, and amortization of $550-$650 million by the end of 2027.

How are things looking in the second half of the year?

Despite the strong performance in the first half of 2026, the second half of the year hasn't provided much for investors to celebrate, with shares sinking more than 20% as of this writing since June 30. For a speculative stock such as USA Rare Earth, the volatility is to be expected. Thus, those with lower risk tolerances who are interested in growth stocks that provide rare-earth exposure will be more interested in a rare-earth ETF.

Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.