Here's Why USA Rare Earth Stock Surged, Again, Today
Key Points
The company could conceivably feed its production facility with materials from Venezuela, and receive investment from the U.S. government in the future.
The share price rises in recent days are driven by speculation.
- 10 stocks we like better than USA Rare Earth ›
Another day and another double-digit share price for USA Rare Earth (NASDAQ: USAR). The stock rose by as much as 11% by 2 p.m. today. There are two reasons behind the move today.
Venezuela
Ongoing speculation that events in Venezuela would lead to favorable trading relations with the U.S., and an opportunity for USA Rare Earth to procure rare-earth elements to feed its its Stillwater, Oklahoma magnet producing facility, As discussed previously, Venezuela is rich in rare earth elements, USA Rare Earth needs non-China sourced materials to produce magnets in Stillwater, and generate the earnings and cash flow to support development of the Round Top deposit in Texas starting in 2028. Consequently, if, and it's a big "if", it can do so, then its business model would be significantly derisked.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
China curbs rare-earth exports.
The fact is that the company and its peers, such as MP Materials, trade on speculation surrounding political developments related to China's dominant position in rare-earth materials and magnets. When trade tensions escalate on the matter, investors begin to factor in the possibility of government support and commercial investment by major companies seeking to secure a domestic supply of magnets.
Image source: Getty Images.
As such, the news that China has imposed export bans on rare-earth elements that could be used for military purposes to Japan (due to comments by the Japanese Prime Minister regarding Taiwan) is likely to strengthen the idea that support for USA Rare Earth is inevitable at some point. As MP Materials investors have discovered this year, that could lead to a sharp appreciation in the stock price. Something to consider, even if the recent moves in USA Rare Earth's stock price are driven by speculation.
Should you buy stock in USA Rare Earth right now?
Before you buy stock in USA Rare Earth, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and USA Rare Earth wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $493,290!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,153,214!*
Now, it’s worth noting Stock Advisor’s total average return is 973% — a market-crushing outperformance compared to 195% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of January 6, 2026.
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool recommends MP Materials. The Motley Fool has a disclosure policy.
Recommended Articles
