Why USA Rare Earth Stock Gave Up Some Gains Today

Over the past week, shares of the mining start-up, USA Rare Earth (USAR), have experienced a surge. This upward trend started when competitor MP Materials (MP) secured a $400 million investment deal with the U.S. Department of Defense last week. As a result, investors speculate that USA Rare Earth could be in line to receive government subsidies, leading to increased optimism around its stock.

But that’s looking like an increasingly bad bet.

USA Rare Earth is no MP Materials

During 1:55 p.m. ET on Wednesday, shares of USA Rare Earth have dropped by 7.1%. The cause for this decline is straightforward: USA Rare Earth is in no way comparable to MP Materials. It’s far from it.

Unlike MP, which saw over $200 million in revenue last year with its active mining operations, refining business expansion, and emerging rare earth magnets sector – all projected to grow by 30% this year and nearly double again by 2026 – USA Rare Earth recorded no revenue at all last year.

This year is likely to follow a similar pattern, and although the USA Rare Earth company may start generating revenue by 2026, it’s uncertain whether or not, or when, the stock will become profitable. The projected adjusted profits are set for 2028, but no analyst has specified a date for when USA Rare Earth might record a profit as per generally accepted accounting principles (GAAP).

Is USA Rare Earth stock a sell?

Currently, MP Materials is in a ten-year contract with the Pentagon for the purchase of rare earth magnets at fixed prices. Notably, they also recently disclosed a separate $500 million collaboration with Apple for the acquisition of additional magnets.

As each day goes by, it’s increasingly evident which uncommon earth mineral both the U.S. government and major American corporations tend to favor collaborating on, and it’s not called “USA Rare Earth.

2025-07-16 22:18

USA Rare Earth is no MP Materials

Is USA Rare Earth stock a sell?

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