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

The U.S. government's strategic focus on strengthening critical materials supply chains continues to drive significant market interest and investment. Recently, Trilogy Metals (TMQ) secured a $36 million investment from the U.S. Department of War, acquiring approximately 10% equity, and received key permits for its Ambler Road project, resulting in a 211% surge in its shares. Following previous government-backed successes like MP Materials and Lithium Americas, USA Rare Earths (USAR) is now positioned as a potential next beneficiary, being in close communication with the White House regarding its rare earth magnet production capabilities, signaling continued upside potential for companies aligned with this national priority.

Analysis

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 Metals Stock Forecast Today 12-Month Stock Price Forecast:$10.0058.48% UpsideHoldBased on 5 Analyst Ratings | Current Price | $6.31 | |---| | High Forecast | $10.00 | |---| | Average Forecast | $10.00 | |---| | Low Forecast | $10.00 | |---| Trilogy Metals Stock Forecast Details 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? USA Rare Earth Stock Forecast Today 12-Month Stock Price Forecast:$17.67-34.62% DownsideModerate BuyBased on 4 Analyst Ratings | Current Price | $27.02 | |---| | High Forecast | $22.00 | |---| | Average Forecast | $17.67 | |---| | Low Forecast | $15.00 | |---| USA Rare Earth Stock Forecast Details 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. Before you consider USA Rare Earth, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and USA Rare Earth wasn't on the list. While USA Rare Earth currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here Thinking about investing in Meta, Roblox, or Unity? Enter your email to learn what streetwise investors need to know about the metaverse and public markets before making an investment. Get This Free Report Like this article? Share it with a colleague. Link copied to clipboard. The U.S. government's strategic prioritization of critical supply chain resilience, particularly in rare earth metals and lithium, continues to drive significant investment. Trilogy Metals (TMQ) recently secured a $36 million investment from the U.S. Department of War, acquiring approximately 10% equity, alongside key permits for its Ambler Road project. This backing, aimed at developing domestic sources for copper, cobalt, zinc, and lead from the Upper Kobuk Mineral Projects, propelled TMQ shares up 211% on October 7. This follows precedents set by MP Materials (MP), which saw a 370% YTD return and an additional 63% gain post-government stake, and Lithium Americas (LAC)'s 180% surge. USA Rare Earths (USAR) is now positioned as a potential next beneficiary, citing "close communication" with the White House and its focus on rare earth magnets as a domestic alternative. Conversely, Critical Metals (CRML) experienced a 14% share plummet after being reportedly excluded from government consideration, underscoring the binary impact of such policy decisions. Analyst consensus for TMQ indicates a 12-month price target of $10.00, suggesting 58.48% upside with a 'Hold' rating. For USAR, the average target is $17.67, implying 34.62% downside, despite a 'Moderate Buy' recommendation. This divergence highlights varied outlooks even within a strategically favored sector, which generally benefits from a strongly positive sentiment driven by policy support.

Key Decisions for Investors

• Investors should prioritize companies demonstrating clear alignment with U.S. critical supply chain reshoring initiatives, as government backing acts as a powerful catalyst for significant stock appreciation, as seen with MP Materials and Trilogy Metals.
• Conduct thorough due diligence on individual company prospects and analyst sentiment, noting that even within favored sectors, outlooks can diverge, such as USAR's projected downside despite a 'Moderate Buy' rating.
• Recognize the high-stakes, binary nature of government investment decisions; companies not selected, like Critical Metals, face substantial downside risk, while beneficiaries can experience immediate, dramatic surges.