Rare earth stocks have been on fire recently as Washington commits serious capital to breaking China’s stranglehold on critical minerals. The sector’s momentum reflects more than typical trade war volatility—it signals a fundamental shift in how the U.S. approaches strategic resource development.
JPMorgan just pledged up to $10 billion for national security industries including critical minerals. The Pentagon is pushing forward with $1 billion in strategic stockpiling. These aren’t reactive gestures. They represent recognition that China’s 70% control of global rare earth mining and 90% dominance in processing creates unacceptable vulnerability.
Three American companies stand to benefit as federal dollars and institutional capital flow into domestic rare earth capacity.
MP Materials (MP)
MP Materials runs the only operational rare earth mine in the United States at Mountain Pass, California. What sets the company apart is its July 2025 Pentagon deal that fundamentally changed the economics of domestic rare earth production.
The Defense Department invested $400 million and established a 10-year price floor of $110 per kilogram for neodymium-praseodymium oxide. When market prices drop below that level, the government covers the difference. When prices rise above $110, the Pentagon takes 30% of the upside.
This structure solves the core problem that has plagued U.S. rare earth producers for decades: Chinese price manipulation that makes domestic operations economically unviable. With guaranteed minimum pricing, MP Materials can invest in capacity expansion without betting on sustained high prices.
Beyond defense, MP Materials locked in a $500 million Apple deal to supply rare earth magnets starting in 2027 for hundreds of millions of devices. Second-quarter revenue jumped 84% year over year to $57.4 million as production ramped.
The company remains unprofitable but analysts project earnings of 91 cents per share in fiscal 2026 as volumes scale. The Pentagon backing provides downside protection while the Apple partnership validates commercial demand beyond military applications.
USA Rare Earth (USAR)
USA Rare Earth takes the highest-risk approach, building a fully integrated supply chain from Texas mining rights through Oklahoma magnet production. The company went public in March 2025 and has seen its stock swing wildly based largely on speculation about potential government backing.
New CEO Barbara Humpton, formerly of Siemens USA, took over in October and immediately sparked rally speculation by stating the company maintains “close communication” with the White House. Recent government equity stakes in MP Materials and Lithium Americas established precedent that USA Rare Earth could follow.
The company acquired U.K.-based Less Common Metals in late September, adding established processing capabilities outside China. USA Rare Earth produced its first magnets in January 2025 but won’t generate meaningful revenue until 2026 or profits before 2028.
The stock trades around a $3 billion market cap with minimal current revenue. That valuation prices in perfect execution and likely government financial support. For aggressive investors betting on Washington’s determination to fund domestic capacity, USA Rare Earth offers maximum leverage. For everyone else, it’s too early.
Energy Fuels (UUUU)
Energy Fuels brings a different profile through its dual uranium and rare earth operations. The company generates current revenue from uranium mining while building rare earth separation capabilities at its White Mesa, Utah facility.
Energy Fuels completed Phase 1 rare earth infrastructure in early 2024 and began commercial production of neodymium-praseodymium oxide that meets specifications for magnet manufacturing. POSCO International recently confirmed it manufactured Energy Fuels material into magnets meeting requirements for electric vehicle motors.
The company has been aggressive securing feedstock through acquisitions in Brazil, Australia, and Madagascar. Australia’s Donald project could begin supplying White Mesa by late 2027.
Energy Fuels carries a debt-free balance sheet and uranium operations that provide cash flow while rare earth capabilities develop. The stock has surged nearly 200% since the MP Materials Pentagon deal as investors anticipate similar government support.
CEO Mark Chalmers has argued publicly that diversifying government investment beyond MP Materials makes strategic sense, positioning Energy Fuels as complementary through its heavy rare earth focus versus MP’s light rare earth specialization.
The Investment Case
The rare earth opportunity isn’t primarily about tariffs or trade rhetoric. It’s about institutional recognition that Chinese supply chain dominance creates unacceptable risk across defense, technology, and industrial applications.
Artificial intelligence infrastructure demands rare earth magnets for power management and cooling. Electric vehicles need them for motors. Defense systems can’t function without them. Current U.S. capacity can’t meet a fraction of domestic demand.
MP Materials offers the most de-risked exposure through Pentagon backing and commercial partnerships. USA Rare Earth delivers speculative leverage on expanded government support. Energy Fuels provides middle-ground positioning through current revenue and diversified operations.
All three remain speculative to varying degrees. MP Materials is the only one with clear path to profitability and government price protection. The others bet on similar support materializing or commercial markets developing faster than expected.
Position sizing should reflect extended timelines and binary execution risk. The sector has run hard on policy momentum, but the fundamental supply chain problem these companies aim to solve is real and bipartisan.