USAR Stock Tumbles 7% Overnight On Q2 Revenue Miss: Why Are Retail Traders Loading Up On It?

Despite USA Rare Earth’s second-quarter revenue miss, strong cash reserves, government funding, and expansion plans stoked optimism.

• USA Rare Earth’s Q2 revenue of $5.8 million missed $13.3 million Street’s view. 
• The company held $1.53 billion in cash, secured up to $1.6 billion in CHIPS Act support, and is pursuing a $2.8 billion Serra Verde acquisition. 
• CEO Barbara Humpton said Chinese export restrictions are ramping up Western efforts to diversify rare earth supply chains. 

USA Rare Earth (USAR) stock dropped 7% overnight as investors weighed the company’s second-quarter (Q2) revenue miss and ambitious expansion plans. Still, retail traders appear confident in the company’s prospects, with its $1.53 billion cash position, government-backed funding and push to build a non-China rare earth supply chain strengthening the bullish case.

USAR Posts Revenue Miss But Cash Surges Amid Expansion Push 

USA Rare Earth reported $5.8 million in Q2 revenue, missing Wall Street’s expectation of $13.33 million, according to Fiscal AI data. However, the Stillwater, Oklahoma-based company’s net loss narrowed to $10.3 million, compared with a $142.5 million loss last year. Loss of $0.15 per share smashed the Street’s view of $0.19 loss per share.  

The company ended June with about $1.53 billion in cash. USA Rare Earth secured agreements with the U.S. Department of Commerce that could provide as much as $1.6 billion through the CHIPS Act, combining federal funding and loan capacity. The company is pursuing a roughly $2.8 billion acquisition of Serra Verde Group in Brazil, which owns the Pela Ema rare earth operation.

USA Rare Earth stock traded nearly 8% lower overnight, heading into Tuesday. 

USA Rare Earth Bets On A China-Free Rare Earth Supply Chain 

During the Q2 earnings call, USA Rare Earth CEO Barbara Humpton said recent Chinese export restrictions have highlighted the risks companies face when they depend on a single geopolitical rival for materials used in motors, aircraft, semiconductors, robotics, medical equipment and defense systems.

“More and more companies have now concluded that single-source dependency on a strategic competitor, one that has become a geostrategic adversary is a risk they can no longer tolerate. That conclusion is driving companies to rebuild their supply chains around long-term, reliable and trustworthy sources.” 

The CEO pointed to sharp increases in Western rare earth prices as evidence that supply shortages are becoming the industry's defining challenge and argued that mining alone cannot solve the supply problem.

He added that USA Rare Earth wants to connect extraction, processing, metal and alloy production and magnet manufacturing so that each stage supports the next. The strategy aims to reduce bottlenecks and avoid relying on adversarial countries for critical processing steps.

“That is what makes the integrated value chain we are building so valuable. A mine without processing is a stranded asset. Processing without metal and alloy making capability is a science project.”

What USAR Retail Traders Are Saying 

On Stocktwits, retail sentiment around the stock improved to ‘extremely bullish’ from ‘bullish’ territory the previous day. The stock saw a 188% rise in message volume over the past week with 2.7% gain in watchers. 

A user said, “Since the future is bright, this will recover in the next couple days.  I bought too early but better than chasing it when it shoots up to $37 as predicted.  I'm not worried.”

Another user said, “No one thought they were making money this quarter as they RAMP up for 2027 and get ready for taking CHINAs place in RARE earths in the USA, we get 1 more chance to LOAD up before we get back to ALL TIME HIGHs! TRUMP backed so buying more.”

A third user said, “In the mid-term through 2027-2028, If you have the ability to set it and forget, then do so.I don't see a path where this thing won't be trading at a min in the $40's and potentially much higher $90+”

USAR stock has surged 60% year-to-date. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.<