Trump’s Metals Bet Sends Rare Earth Stocks Soaring—Is USAR Next?

Key Points

• Rare earth and critical metals stocks have been all the rage after the Trump administration took a 15% stake in MP Materials.
• Lithium Americas was the next firm to receive government funding, sending shares skyrocketing.
• Trilogy Metals surged 211% after a $36 million U.S. DOW investment, and USA Rare Earths could be next in line for a strategic investment.

President Trump has made strengthening critical U.S. supply chains a clear priority. This is particularly true when it comes to rare earth metals and elements like lithium.

For investors, Trump’s efforts have led to extremely impressive returns in several stocks. Most notably, rare earth metals stock MP Materials NYSE: MP has returned over 370% YTD, thanks to the government's 15% stake in the company. Lithium Americas NYSE: LAC was the next company in which the government took a stake, and sent shares up more than 180% in the past 30 days.

Two additional metal names are now drawing investor attention as possible beneficiaries from Trump’s strategic reshoring push: Trilogy Metals NYSEAMERICAN: TMQ and USA Rare Earths NASDAQ: USAR. 

Trilogy Metals Stock Skyrockets on $36 Million Government Backing

Trilogy is the latest metals and mining company to garner a significant investment from the U.S. government.

After the market close on Oct. 6, Trilogy revealed that the U.S. Department of War (DOW) intends to directly buy nearly $18 million worth of its shares. The DOW also intends to pay South32 ASX: S32, Trilogy’s partner at the Upper Kobuk Mineral Projects (UKMP), nearly $18 million in exchange for Trilogy shares. 

This nearly $36 million investment would give the DOW ownership of approximately 10% of Trilogy’s equity.

Additionally, the administration granted key permits for Trilogy’s Ambler Road project. Constructing Ambler Road would connect the UKMP to a strategically important Alaskan highway, helping facilitate the UKMP's development.

With these funds and permits, Trilogy and South32 will advance the exploration and development of UKMP. The UKMP contains deposits of key minerals like copper, cobalt, zinc, and lead.

As a result, TMQ closed up by 211% on Oct. 7. Whether or not shares will continue gaining is difficult to say.

However, historical comparisons show continued upside is possible. MP Materials has gained another 63% after initially surging 51% on its government investment. While Lithium Americas is down around 9% since its government backing was officially announced on Oct. 3, it is worth noting that this only takes into account two days of added trading. A longer timeline could allow LAC shares to rebound from their recent dip.

USA Rare Earths: The Next Magnet Producer in Line?

Among the next potential beneficiaries of the administration’s critical materials push, USA Rare Earths looks like a front-runner.

In an Oct. 2 interview with CNBC, USA Rare Earth’s CEO Barbara Humpton said the firm is in “close communication” with the White House, suggesting that the company could be in store for a government investment.

Although this is by no means certain, it stands in contrast to news around Critical Metals NASDAQ: CRML. On Oct. 6, Bloomberg reported that the company was not being considered for government investment, causing shares to plummet by nearly 14% the next day. With Critical Metals out of contention, the possibility of USA Rare Earths attracting government resources rises.

What makes USAR particularly attractive to policymakers is its focus on rare earth magnets, the same product line that made MP Materials a cornerstone of U.S. supply chain strategy. USAR’s Texas Top Round Deposit and Oklahoma processing facility position it as a viable domestic alternative should MP face disruptions.

Right now, MP is the only U.S. company that produces rare earth magnets at scale. Natural disasters can affect mining companies–Freeport McMoRan’s NYSE: FCX Indonesian mine serves as a prime example–so it would make sense for policymakers to help diversify the domestic supply chain of this product. USAR’s Texas Top Round Deposit and Oklahoma processing facility position it as a viable domestic alternative should MP face disruptions.

Trump’s Rare Earth Love Affair Could Create New Winners

Overall, rare earth and other metals companies are clearly garnering significant interest from the Trump administration. While it's very difficult to predict which stock will gain a government investment next, USA Rare Earths may be in a prime position. Meanwhile, the price action from MP Materials shows these stocks can experience substantial upside even after markets initially reward a government stake.