Rare earth stocks are shining brightly on investors' radars these days. Shares of USA Rare Earth (USAR 7.73%), 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.
