For USA Rare Earth (USAR 6.40%), the timing is hard to ignore. Founded in 2019, the young mining company is riding a shift that's bigger than itself and may prove fruitful for many years or decades to come. That shift is the growing urgency around rebuilding the U.S.' domestic supply chain of rare-earth metals, which is currently negligible and inadequate to serve the industrial needs of American companies.
Just consider this: China accounted for roughly 59% of the world's rare-earth mining, 91% of refining, and 94% of permanent magnet production in 2024, according to the International Energy Agency. You don't need to be a statistician to see the problem: The U.S. is uncomfortably dependent on China for rare-earth metals, and one policy change -- such as China deciding not to sell these metals to the U.S. -- could wreak havoc on the American economy.
USA Rare Earth is just one of a handful of companies working to rebuild domestic capacity over rare-earth metals. It's a company in a critical position, and, if everything swings its way, it could become a millionaire maker for early investors.
Image source: Getty Images.
A strategic opportunity, but not a guaranteed win
The most important thing to know about USA Rare Earth is the critical supply of rare-earth metals that is under its control. That, of course, is its Round Top Deposit in West Texas, a huge polymetallic body containing at least 15 of the 17 rare earth elements, plus lithium and other critical materials. This is one of the most, if not the most, significant rare-earth deposits in the U.S., and it contains several heavy rare-earth elements critical in the production of permanent magnets.
Permanent magnets? That's right. These magnets can hold their magnetic property indefinitely -- that is, they don't need electricity to function -- and they have so many applications in the modern world, from electronics to defense systems to wind turbines, that their absence or shortage could effectively cause bottlenecks everywhere, all at once.
That's why USA Rare Earth is concurrently building a magnet factory in Oklahoma. It's also spending money at its R&D lab in Colorado to figure out the best extraction and production techniques to turn ore into magnets in the most cost-efficient way possible.
NASDAQ: USAR
Key Data Points
Already one month into 2026, the company has raised about $3.1 billion to help it open its Round Top mine and finish the magnet factory. This includes $1.6 billion in loans and federal grants.
If USA Rare Earth can make magnets in large batches, customers will line up. Think blue chip companies, like Ford Motor Company, General Motors, or Apple, or even the Department of Defense, placing large orders of homegrown magnets that meet their specs. Revenue growth could be substantial, and its current market cap, about $4.7 billion, could go well into large-cap territory.
That, however, is the future. The present is much plainer. USA Rare Earth is pre-revenue, and it must overcome many execution risks, both mining and production, before it's producing magnets at scale. Indeed, several years of work separate it from the success story that its valuation currently reflects.
USAR Revenue (TTM) data by YCharts
As such, USA Rare Earth will likely be volatile, at least for now. It can be a millionaire maker, sure, but investors would be wise to size positions according to their risk tolerance.
