Why USA Rare Earth Stock Soared Today
Key Points
USA Rare Earth announces plans to build a rare-earth magnet factory in France.
The French government is offering huge subsidies for the project.
- 10 stocks we like better than USA Rare Earth ›
USA Rare Earth (NASDAQ: USAR) stock, one of a handful of start-up companies attempting to jump-start rare-earth oxide mining and rare-earth magnet manufacturing in the United States, soared 10% through 12:20 p.m. ET Tuesday.
USA Rare Earth announced earlier in the day that its Less Common Metals Europe SAS subsidiary will develop a 3,750 metric ton per annum (mtpa) metal and alloy production facility in Lacq, France. The new facility will be co-located with an existing Carester SAS 1,600 mtpa Caremag oxide processing facility in Lacq, which is scheduled for commissioning in late 2026.
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 »
Image source: Getty Images.
Details, please
The way this seems to work is that Carester will receive rare-earth oxide from miners and process it, then shuttle it next door to LCM for production as rare-earth metal and alloy magnets.
The French government plans to subsidize the project, covering the cost of "up to 45% of all eligible equipment" as well as covering up to €130 million ($152.6 million) for the cost of the real estate. The government may even pay for hiring and training of the employees needed to work at the new plant!
Is USA Rare Earth stock a buy?
It's not clear what the total cost of building the new facility will be. What is clear is that the French government seems willing to bear much of the cost -- which means USA Rare Earth will not need to -- in the interests of building "Europe's first metal-making platform" for rare-earth magnets, and reducing the Continent's dependence upon China for rare-earth magnet supply.
While I still have reservations about USA Rare Earth stock (which forecasts for it to keep losing money until at least 2030, how could I not?), today's announcement is clearly great news for USA Rare Earth.
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 $474,578!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,141,628!*
Now, it’s worth noting Stock Advisor’s total average return is 955% — a market-crushing outperformance compared to 196% 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 20, 2026.
Rich Smith 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.
Recommended Articles
