USA Rare Earth Surges 23.36% on $100M LCM Acquisition, Eyes Industry Leadership

Shares of USA Rare Earth (USAR) surged 23.36% on Tuesday, marking a two-day rally that propelled the stock to its highest level since October 2025. The intraday gain reached 26.94% as investors reacted to a strategic milestone reshaping the company’s industry position.

The catalyst for the upward momentum stems from USAR’s $100 million acquisition of UK-based Less Common Metals (LCM), a rare earth metal and alloy producer. This transaction positions USAR as the leading scaled rare earth manufacturer outside China, granting access to critical materials such as Samarium Cobalt and Neodymium Praseodymium. These materials are vital for advanced magnets used in defense, automotive, and industrial applications. LCM’s expertise in processing both mined and recycled rare earth oxides enhances USAR’s sustainability profile and supply chain resilience, while its established government and commercial relationships provide a strategic advantage.

Financing the acquisition is a $125 million equity investment from an existing shareholder, accelerating USAR’s growth initiatives. This includes expanding its Oklahoma magnet production facility, which, combined with LCM’s capabilities, creates an end-to-end “mine-to-magnet” supply chain. The company also plans to scale LCM’s operations across the UK and Europe, diversifying its production footprint and global market access. These moves align with surging demand for rare earth materials driven by AI, robotics, and clean energy sectors.

Strategic partnerships further underscore USAR’s expanding influence. Agreements with Enduro, ePropelled, and Moog highlight its integration into critical industries. A memorandum of understanding with Enduro secures U.S.-sourced neodymium magnets for pipeline cleaning applications, while collaborations with ePropelled and Moog target drone technology and data center cooling solutions. These alliances reinforce USAR’s ability to meet niche demand in high-growth markets.

Leadership changes also bolster confidence in the company’s trajectory. The appointment of Barbara Humpton as CEO brings expertise in technology-driven infrastructure and national security, aligning with USAR’s mission to establish a domestic rare earth supply chain. Meanwhile, the Trump administration’s broader push to reduce reliance on Chinese rare earths—evidenced by its 5% equity stake in Lithium Americas—signals potential policy tailwinds for USAR’s initiatives.

Despite a Q2 2025 net loss of $143 million reflecting operational scaling costs, analysts have revised their outlooks. Some now label the stock “Overweight” or “Buy,” citing USAR’s vertical integration strategy, government contract potential, and sectoral tailwinds. However, risks remain tied to execution challenges and market volatility, with mixed sentiments reflecting the balance between long-term strategic value and short-term financial pressures.