Canaccord Raises USA Rare Earth (USAR) PT to $33 Following $1.6B CHIPS Program Commitment

USA Rare Earth Inc. (NASDAQ:USAR) is one of the new stocks on the rise. On January 27, Canaccord increased its price target for USA Rare Earth to $33 from $23, while maintaining a Buy rating. This followed the company’s announcement of a $1.6 billion letter of intent from the US Department of Commerce’s CHIPS Program and a collaboration with the Department of Energy. This federal backing led the firm to accelerate its operational timeline and update its financial estimates.

Although the firm noted a structural deficiency compared to peers, specifically a lack of government-guaranteed price floors and offtake agreements, management remains confident that the business model is sustainable without such protections, positioning the company as a key player in the domestic rare earth supply chain.

On the same day, Benchmark analyst Subash Chandra also raised the price target for USA Rare Earth Inc. (NASDAQ:USAR) to $45 from $15 with a Buy rating after the company secured 85% of the $4.1 billion required for full vertical integration. The capital includes $1.9 billion in government funding, which is surprisingly large in scale. The new target accounts for a doubling of projected magnet-making capacity to 10,000 metric tons annually, while also incorporating multiple revenue streams from upstream mining at Round Top, midstream metal-making, and third-party concentrate processing.

USA Rare Earth Inc. (NASDAQ:USAR) mines, processes, and supplies rare earths and other critical minerals in the US. It explores for neodymium, dysprosium, terbium, gallium, beryllium, lithium, and other critical minerals.

While we acknowledge the potential of USAR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.