Why USA Rare Earth Stock Is Shooting Higher Today

Key Points

• USA Rare Earth is developing a rare earth magnet production facility in Oklahoma.

• Shares of USA Rare Earth soared last week, and they continue to do so today.

• Since it doesn't generate revenue, USA Rare Earth is a highly speculative investment.

• 10 stocks we like better than Usa Rare Earth ›

Rare earth stocks are shining brightly on investors' radars these days. Shares of USA Rare Earth (NASDAQ: USAR), for example, climbed 11.4% last week, and they're continuing to soar higher today.

As of 11:17 a.m ET, shares of USA Rare Earth are up 11.6%.

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A possible catalyst ahead for the company

While USA Rare Earth hasn't reported any news today that would explain why shares are climbing higher, it's unsurprising that bulls are racing to buy the stock. It's possible that investors are bidding the stock higher on the speculation that it will ink a similar agreement to the one that MP Materials announced last week with the U.S. government.

What's good for the goose is good for the gander, and since there aren't numerous rare earths producers located in the United States, investors are likely surmising that USA Rare Earths will either partner with the U.S. government, or there will be another catalyst that will expedite the company's growth.

USA Rare Earth is developing a rare earth magnet manufacturing facility in Oklahoma, where it plans to begin commercial operations in the first half of 2026.

Should investors load up on USA Rare Earths now?

In light of the political enthusiasm for shoring up the nation's supply of rare earths from domestic sources, it makes sense that investors are keenly attentive to USA Rare Earth stock. It's important for potential investors to recognize, however, that the company is still in the pre-revenue phase of its development, making it a highly speculative investment. Therefore, those who are less interested in higher-risk investments but want rare earth exposure would be better served considering MP Materials at this point.

Should you invest $1,000 in Usa Rare Earth 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.