Why Energy Fuels Stock Is Powering Higher Today

Key Points

• Energy Fuels reported successful production of a rare-earth element at its facility in Utah.

• The company foresees possibly starting production at a rare-earth element separation facility in 2026.

• Because Energy Fuels is still unprofitable, investors should consider buying shares only if they have a high tolerance for risk.

• 10 stocks we like better than Energy Fuels ›

Rebounding from an inauspicious first half of the week, shares of Energy Fuels (NYSEMKT: UUUU) are soaring today. While investors would be right to suspect that the stock's climb has something to do with its nuclear energy business, it turns out that a development regarding the company's rare-earth operations is actually driving shares higher.

As of 12:04 p.m. ET, shares of Energy Fuels are up 8.3%, retreating from their earlier climb of 11.6%.

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Image source: Getty Images.

News out of the Beehive State is generating a lot of buzz today

Energy Fuels reported yesterday the it has achieved production of its first kilogram of dysprosium oxide -- a heavy rare-earth element -- at its White Mesa Mill in Utah. The company asserted in the related press release its belief that it's the first U.S. company to both produce high-purity dysprosium oxide and publicly disclose actual production volumes and purities.

The company is also exploring production of terbium oxide as it expands production of dysprosium oxide. Should the company continue to achieve favorable results, it plans on developing these elements at commercial scale as well as working on separation of other heavy rare-earth elements at the Utah facility, starting production as soon as fourth quarter 2026.

The domestic production of rare-earth elements is a priority of the Trump administration. The Department of Defense, for example, entered into a major public-private partnership with MP Materials earlier this summer.

Should investors power their portfolios with Energy Fuels now?

With news of the successful production of rare-earth elements, the bullish argument for Energy Fuels is becoming a lot more convincing. It's imperative for prospective investors to recognize, however, that the company is still unprofitable and that development of the rare-earth elements separation facility is a significant capital expenditure, so there is a considerable amount of risk here.

Should you invest $1,000 in Energy Fuels right now?

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