USA Rare Earth (USAR) Stock: Company Secures $3.1 Billion in Government and Private Funding

TLDR

• USA Rare Earth stock closed up 7.9% at $26.72 on Monday after hitting an intraday high of $32.07 with trading volume surging 439% to 121.6 million shares
• The company received a non-binding letter of intent for approximately $1.6 billion from the U.S. government through the CHIPS Program, including $277 million in federal funding and a $1.3 billion senior secured loan
• USA Rare Earth also secured a $1.5 billion private placement investment priced at $21.50 per share, expected to close January 28, 2026
• The deal will result in the U.S. government potentially owning 8-16% of the company through 16.1 million shares and 17.6 million warrants
• The funding is intended to accelerate the company’s mine-to-magnet operations at its Round Top facility in Texas, with production targets pointing toward 2028

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USA Rare Earth shares climbed 7.9% on Monday following the announcement of a major government financing deal. The stock reached an intraday high of $32.07 before closing at $26.72.

USA Rare Earth Inc, USAR

Trading volume exploded to 121.6 million shares. That represents a 439% increase over the average daily volume of 22.6 million shares.

The company secured two separate financing agreements totaling roughly $3.1 billion. The first comes from the U.S. government through the CHIPS Program.

The second is a private placement with institutional investors. Both deals are designed to fund USA Rare Earth’s mine-to-magnet operations.

The government package includes $277 million in proposed federal funding. It also features a $1.3 billion senior secured loan.

As part of the agreement, the Commerce Department will receive 16.1 million shares of common stock. The government will also get 17.6 million warrants.

This could give the U.S. government an 8-16% stake in the company on a fully diluted basis. The letter of intent remains non-binding and subject to approvals and definitive documentation.

Breaking China’s Rare Earth Grip

The Trump administration has prioritized domestic rare earth production. China currently controls an estimated 85% of global rare earth processing capacity.

Rare earths are critical components in smartphones, electric vehicles, and F-35 fighter jets. China has previously used its market dominance in trade negotiations.

USA Rare Earth plans to extract 40,000 tons of ore daily by 2030. The company also aims to produce 10,000 tons of rare earth magnets annually.

Analyst George Gianarikas estimates U.S. annual demand for rare earth magnets at about 50,000 tons per year. That number is growing.

The company’s Round Top deposit is located in Hudspeth County, Texas. Operations also include processing facilities and a magnet plant in Stillwater, Oklahoma.

On the same day, USA Rare Earth announced a $1.5 billion private placement. The deal involves issuing approximately 69.8 million common shares at $21.50 per share.

The private placement is expected to close on January 28, 2026. Proceeds will go toward general corporate purposes and the mine-to-magnet buildout.

Technical Momentum and Market Response

Six equity research analysts currently rate USA Rare Earth as a buy. One analyst has assigned a sell rating.

The consensus price target sits at $24.67. Benchmark initiated coverage with a buy rating on January 21.

Roth Mkm reiterated its buy rating with a $35 price target on Monday. The stock’s 50-day moving average stands at $15.71.

The 200-day moving average is $17.13. USA Rare Earth currently has about 148 million shares outstanding and a market value of $3.7 billion.

The company is not yet profitable. It reported a loss of $0.25 per share in its most recent quarterly earnings, missing estimates by $0.19.

The government funding will be released in phases tied to development milestones. These include progress at the Round Top mine, processing facilities, and magnet manufacturing expansion.

USA Rare Earth must still secure an estimated $4.1 billion in additional capital expenditures. The company also needs a $250 million revolving credit facility.

The company’s Stillwater magnet plant is progressing with Line 1a commissioning underway. Round Top commercial production targets have been moved earlier in company communications to 2028.

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