USA Rare Earth (USAR 6.35%) stock is making gains in Tuesday's trading. The company's share price was up 6.8% as of 3:45 p.m. ET. Meanwhile, the S&P 500 was down 2.1%, and the Nasdaq Composite was down 2.5%. The stock had been up as much as 14.6% in the daily session.
The broader market is getting hit with strong bearish momentum today as investors react to new tariffs and other risk factors related to the U.S.'s attempt to acquire Greenland from Denmark. Despite the valuation pressures, USA Rare Earth stock is moving higher thanks to news that the company is poised to open a new mineral refining facility in France.
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USA Rare Earth published a press release before the market opened this morning announcing that it's on track to open a new mineral production facility in Lacq, France. The production plant is expected to produce 3,750 metric tons of metal and alloy per year, and construction of the plant is expected to begin this year. Even better, the company is poised to receive substantial funding support from the French government.
Is USA Rare Earth stock a buy right now?
USA Rare Earth is now valued at approximately $2.5 billion. Meanwhile, the company's business has yet to produce any revenue. The stock is clearly a speculative bet, but there are dynamics at play that suggest that it could be a worthwhile buy for risk-tolerant investors.
NASDAQ: USAR
Key Data Points
Through its Less Common Metals Europe SAS subsidiary, USA Rare Earth is poised to receive sizable government subsidies for its production plant in France. The French government will provide credits covering up to 45% of equipment costs and 130 million euros for real-estate costs.
With China currently accounting for roughly 90% of rare-earth mineral processing, the U.S. and Western allies are making moves to bolster their mining and refining capabilities. There appears to be a good chance that relations between China and Western countries will continue to worsen, and this dynamic could allow USA Rare Earth stock to post market-crushing performance.
