If you’re thinking about investing in USA Rare Earth (USAR 1.47%), you need to consider the risk you’re taking on with this speculative stock. The company’s recent agreement with the U.S. government and its strategic positioning in providing rare-earth magnets for domestic consumption are the keys to understanding the investment case.
Let’s take a closer look.
USA Rare Earth’s recent deal
USA Rare Earth’s agreement resulted in $277 million in federal funding, a $1.3 billion loan under the CHIPS Act, and $1.5 billion in private investment. All of this funding helps the company accelerate the execution of its plan to develop rare-earth magnet production at its Stillwater plant in 2026 and then begin commercial production at its Round Top deposit in Texas in 2028.
Image source: Getty Images.
Round Top, as opposed to, say, MP Materials’ Mountain Pass, is rich in heavy rare-earth…
