Shares of Standard Lithium (SLI 1.53%) are soaring on Wednesday, up 8.3% as of 12:47 p.m. ET. The jump comes as the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) rose by 0.5% and 0.8%, respectively.
This week, the Trump administration took equity stakes in both Trilogy Metals and Lithium Americas in an effort to beef up the U.S. supply of critical minerals. Standard Lithium's stock is rising on hopes a similar deal will be made in the near future.
NYSEMKT: SLI
Key Data Points
Trump looks to secure the lithium supply
The White House announced the investments on Monday that give the U.S. government a 10% stake in Trilogy and a 5% stake in Lithium Americas. The strategy of direct investments in return for equity in public companies is not unprecedented, but the frequency and scale of investments from this administration are -- especially in peacetime.
The moves are all part of the administration's goal of bolstering industries critical to national security, especially those in which the U.S. lags behind China in some capacity. Lithium is critical to national defense, and this week's investments in two metals companies involved in lithium production renewed investors' hopes that Standard Lithium will be next.
While this is certainly a possibility, there's a lot of risk here if Standard is not selected. Its stock price is inflated at the moment on these hopes and could be hit hard if it is passed over.
