Highlights
- USA Rare Earth stock fell 8.24% amid cooling investor enthusiasm and comparisons to more established MP Materials.
- The company remains pre-revenue with no production facilities, contrasting with MP Materials' $200 million revenue and strategic government/corporate contracts.
- Investors are advised to track milestones carefully in the competitive rare earth elements market, focusing on execution over ambition.
USA Rare Earth (NASDAQ: USAR) saw its stock drop 8.24% today as of this writing, retreating to $14.26 as investor enthusiasm cooled following a wave of speculative buying last week. The pullback comes amid growing comparisons to rival MP Materials (NYSE: MP), which recently inked a $400 million magnet supply deal with the U.S. Department of Defense—followed swiftly by a $500 million agreement with Apple.
The gap is glaring
As reported by Rich Smith via The Motley Fool (opens in a new tab), MP Materials has active mining, separation, and magnet production facilities. It posted over $200 million in revenue last year, with projections to double by 2026. USA Rare Earth, by contrast, has no revenue, no production, and no clear start date for commercial operations. Adjusted profits might arrive by 2028, but GAAP profitability remains speculative.
Why this matters to REE investors:
The Biden and now Trump-Kennedy administrations have emphasized reshoring critical mineral supply chains, infrequently mined earths. Yet, federal funds are flowing not to every player, but to those who demonstrate real production readiness and vertical integration. MP Materials is capitalizing on this. USA Rare Earth, despite a compelling long-term story, is still viewed as pre-revenue and high risk. Rare Earth Exchanges has advocated through this platform for the Trump administration to adopt a critical mineral industrial policy, including the establishment of a Critical Minerals Czar.
Key Questions Not Yet Answered:
- Will USA Rare Earth receive similar government support, or has Washington already picked its rare earth champion? How about other firms? MP Materials will likely not be sufficient for America to take on and overcome China.
- Can USAR accelerate its development timeline to stay relevant in a rapidly consolidating magnet market?
- Will nascent U.S. industrial policy continue to favor large, proven players, squeezing out startups with slower paths to revenue?
Investor takeaway
USA Rare Earth may still have long-term promise, especially if its magnet facility in Oklahoma and Round Top, Texas, mine progress as planned. But for now, the market—and the government—seem to be favoring execution over ambition. Retail investors betting on the sector should track milestones closely and distinguish between story stocks and revenue-backed operators. Rare Earth Exchanges tracks the rare earth element supply chain, upstream, midstream, and downstream. See examples at our Projects/Ranking database.
“Investors are advised to track milestones carefully in the competitive rare earth elements market, focusing on execution over ambition”.
Exactly, as we have been saying this decade, project geological confirmations, then who wants, re., major strategic money (not initial ‘test’ investment), major private investments (not small time ‘sophisticated’ investor placement), MOU more so binding offtakes, direct mid/endline chain equity investments, etc.
GLTA – REI
That is why I like Power Metals a Canadian mining company has lithium,cecium, and tantelum all in high %s capex that is very low and a system on property to separate the 3 minerals is a hard rock property with Canadian government backing has all the permits and production set for 2026