USA Rare Earth Inc. (USAR) shares skyrocketed 10.32% in pre-market trading on Monday, outpacing earlier estimates of a 5-6% gain. This surge comes amid a broader rally in rare earth stocks, sparked by reports that the Trump administration is considering taking a stake in Critical Metals Corp, a company developing a major rare earths project in Greenland.

The potential government investment in Critical Metals Corp signals a significant shift in U.S. strategy towards securing critical mineral supplies. This move aligns with the administration's recent investments in other companies like Lithium Americas and MP Materials, underscoring a more aggressive approach to reducing dependence on foreign sources for these vital materials. USA Rare Earth, which is developing its own rare earth mine in Texas and a neo magnet manufacturing facility in Oklahoma, stands to benefit from this increased focus on domestic rare earth production.

Barbara Humpton, CEO of USA Rare Earth, previously mentioned that the company was in close talks with the White House, hinting at potential government interest. As the U.S. government ramps up efforts to secure supply chains for critical minerals, companies like USA Rare Earth are attracting increased investor attention. The stock's dramatic rise reflects growing optimism about the company's strategic position in the rare earth sector and its potential role in strengthening U.S. supply chain security.