USA Rare Earth Is Surging. A Big Government Funding Deal Is Lifting the Stock

Key Takeaways

• USA Rare Earth received $1.6 billion in proposed federal funding to expand mine-to-magnet operations.
• The company raised $1.5 billion in private sector investment through a PIPE transaction.

USA Rare Earth (USAR) is starting the week on a high note with a public-private funding deal that is lifting the company's shares.

The Stillwater, Okla.-based company's stock was recently 14% higher, extending a hot 2026 run that nevertheless has the shares still off late-2025 highs. The company signed a non-binding letter of intent with the Commerce Department to get $1.6 billion in federal funding in exchange for issuing the agency more than 16 million shares of stock and nearly 18 million warrants.

USA Rare Earth also raised $1.5 billion in private sector money via a PIPE transaction, a form of direct investment.

Why This Matters

The U.S. depends heavily on China for rare earths critical to semiconductors, defense, and clean energy. Strengthening domestic production, a top goal of the Trump administration, enhances national security and economic competitiveness.

USA Rare Earth shares have at times been pushed higher by trade tensions between the U.S. and China, with that dynamic seen as benefiting the company as the Trump administration seeks to shore up access to certain minerals. More broadly, the company has taken stakes in a range of U.S. companies and suggested plans to invest even further in private enterprise.

The deal with the government "reflects the strategic importance of USAR's mine-to-magnet platform and its role in closing the rare earth element and critical mineral supply gap for essential industries that underpin U.S. national security, including semiconductors, other critical technologies, and advanced manufacturing," the company said.

The news confirmed media reports over the weekend that the government planned to invest in the company.

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The push to back a domestic rare earth supplier comes as China controls nearly 70% of global rare earth production, giving Beijing substantial influence over materials viewed as critical to U.S. defense systems, semiconductors, and clean energy technologies.

USA Rare Earth shares entered Monday having more than doubled in 2026.

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