Why TMC The Metals Company Skyrocketed Last Week

Key Points

• TMC The Metals Company stock surged 16.5% and is now up more than 580% year to date.

• The stock's big gains are being driven by expectations that the company will receive approval to begin its seabed mining operations.

• Adversarial relations between the U.S. and China have created a backdrop that has made TMC's seabed mining capabilities more valuable.

• 10 stocks we like better than TMC The Metals Company ›

TMC The Metals Company (NASDAQ: TMC) stock posted strong gains over the past week of trading. The seabed mining specialist's share price rose 16.3% over the stretch. Meanwhile, the S&P 500 index climbed 0.6%.

While there wasn't any major news for the company in the week, TMC stock continued to see strong bullish momentum thanks to the possibility that the company will score a major regulatory approval in the not-too-distant future. Its share price has skyrocketed 158% over the past three months and 582% year to date.

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Investors stay bullish on TMC's seabed mining bet

In light of tense relations between the U.S. and China, access to rare earth minerals has become a key strategic priority for the Trump administration. The dynamic has helped to power huge gains for TMC stock, and its share price booked another week of big gains this week despite no fresh bullish news developments.

In April, President Trump signed an executive order to accelerate the the review process for mining applications. TMC quickly submitted its first application for seabed mining approval, and investors have been betting that the company could soon be given the go-ahead to commence operations.

Could recent Nvidia news derail TMC's rally?

Despite posting strong gains in this week's trading, there may have actually been a significant bearish development for the mining specialist. After a meeting between Nvidia CEO Jensen Huang and President Trump, the artificial intelligence (AI) hardware leader announced that it was on track to receive export licenses to sell its H20 processors in China. The sale of the processors into the Chinese market was effectively banned by the Trump administration earlier this year, but it looks like the export licenses are now being granted as part of ongoing trade negotiations.

U.S. government officials have said that the shift on the export license stance is connected to negotiations to secure access to Chinese rare earth minerals. While a deal on rare earth minerals could cause substantial volatility for TMC stock, it's also likely that the U.S. will still continue making moves to bolster its domestic mineral sourcing capabilities.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.