Here's What a $1,000 Bet on USA Rare Earth a Year Ago Looks Like Today
Key Points
USA Rare Earth is developing mines and production facilities that will supply the United States with critical rare-earth elements used in many technologies.
Much of this developmental progress has occurred only in the past year and a half -- shortly after USAR became publicly traded -- and both are resulting in rather extreme volatility.
This volatility isn't likely to abate anytime soon, but it's tolerable if you own this stock with the right mindset.
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There's certainly no denying that the past year and a half has been an exciting time for USA Rare Earth (NASDAQ: USAR) and its shareholders.
After going public through a special purpose acquisition company (SPAC) deal in early 2025, it immediately ramped up the construction of its rare-earth magnet facility in Stillwater, Oklahoma, while simultaneously moving forward with the planning of its flagship mineral resource at Round Top, in Sierra Blanca, Texas, where tons -- figuratively and literally -- of rare-earth elements like gallium and yttrium are waiting to be dug up.
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Then, just a couple of months ago (as part of the CHIPS Act, meant to ensure the country isn't wholly dependent on other nations for critical technology and materials), the company finalized its developmental funding through the U.S. Department of Commerce.
Sensing what was and is still coming, it would have been easy to get excited enough to plow into a stake in the company. Plenty of people did so, in fact. And this raises a question: If you had invested $1,000 in this stock a year ago, when the buzz was just getting going in earnest, how much would you have today?
Image source: Getty Images.
All over the map, but mostly up (yet still far from fully valued)
Cutting straight to the chase, a $1,000 investment in USAR made back in late August 2025 would have grown 13% to roughly $1,140 today.
It clearly didn't get there in a straight line, though. At one point, you would have been up by more than 150%, and several times in the meantime, your position would have been in the red. This sort of extreme volatility is normal for mining and materials stocks, particularly when they represent small, pre-profit companies. A couple of acquisitions and management changes made in the meantime have made it even more difficult to determine what USA Rare Earth's shares are worth.
That isn't preventing the analyst community from making their guesses, however. Although analyst coverage is modest, all eight analysts keeping tabs on this name agree the stock's a strong buy, with a consensus price target of $37.50 -- twice the ticker's current price.
Just make sure your expectations are realistic
Just don't count on the volatility abating simply because analysts are making a bold call based on the company's clear forward progress. Round Top is years away from a meaningful output of rare-earth elements, and for that matter, USA Rare Earth is years away from producing a net profit. There will continue to be plenty of speculative pushing and pulling on the stock's price in the meantime.
Given this, don't forget what it really means to hold a stake in this name. It's not a conventional growth investment, and it's certainly not an income holding. It's mostly speculation that the U.S. will continue to wean itself off China's market-dominant supply of rare-earth metals.
The thing is, it's not a bad bet. It's just one with risk that's commensurate with its potential reward, which you can manage by limiting the size of any trade you decide to step into.
It's also best viewed as a long-term bet, which means be mentally prepared to ride out the inevitable volatility.
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James Brumley 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.
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