Since the second quarter, the Trump administration has made rare investments in key U.S. industry companies. Following previous stakes in rare earth company MP Materials Corporation Ordinary Shares - Class A(MP.US) and Intel Corporation(INTC.US), it has recently accelerated investments in several metal mining enterprises.

Trilogy Metals Inc.(TMQ.US) saw its stock rise by 184% after the U.S. government announced it would acquire a 10% stake. Similarly, lithium mining company Lithium Americas Corp.(LAC.US) received a 10% investment from the government, leading to a stock price surge of over 144%.

Performance of Companies Invested by the Trump Administration

Source: Sahm

Based on current investment projects, the Trump administration plans to limit its investment scope to two core areas: national security and supply chain vulnerabilities. The primary focus is on domestic mining companies to counter China's dominance in rare earths and other critical minerals, essential for various U.S. industry sectors.

Analysts from Seeking Alpha indicate a clear trend, suggesting that the U.S. government is likely to continue investing in mining companies, particularly those involved with critical minerals and strategic supply chains.

A Trump administration spokesperson stated that injecting funds into these companies is crucial to ensuring the U.S. has domestic producers in key areas such as modern weaponry, AI products, and infrastructure.

The U.S. government's frequent interventions raise the question: who will be next?

Market analysts suggest that if the government invests billions or even hundreds of billions of dollars, investors who successfully predict the next target could gain substantial wealth. This drives the market to search for the next "lucky" company.

Notably, the Trump administration's efforts to secure critical materials are not limited to U.S. companies, broadening the scope for investors. We've compiled a list of relevant companies in the U.S. stock market, including those involved in the production and processing of rare earths, uranium, copper, lithium, graphite, beryllium, and cobalt, for investor consideration.

Details include:

According to Bloomberg, sources familiar with the matter revealed that several Australian mining companies have held meetings with officials from multiple U.S. agencies.

Analysts have identified potential candidates, including metallurgical coal producer Ramaco Resources, Inc.(METC.US), which also holds critical mineral resources, and Energy Fuels Inc.(UUUU.US), a company with U.S.-based uranium assets. On the Toronto Stock Exchange, Nouveau Monde Graphite Inc is also on the watchlist, as graphite is considered a critical mineral. Additionally, Australian companies Iluka Resources Ltd and Lynas Rare Earths Ltd have seen their stock prices rise due to speculation that the U.S. government is conducting initial evaluations of their operations.

This growing interest has also driven significant inflows into critical mineral ETFs. The Sprott Energy Transition Materials ETF(SETM.US) recorded its highest-ever monthly inflow in August, with September following closely as the second-highest month in its history.

Sprott Asset Management's ETF Product Manager, Steve Schoffstall, mentioned, "All these events have become catalysts for stock price increases, even if only in the short term." He believes that the U.S. government's direct investment in companies represents a move beyond mere rhetoric, aiming to stimulate growth in specific industries within the U.S genuinely.

Risks of speculation cannot be ignored

The risks of speculative trading should not be overlooked. Last Monday, a White House spokesperson clarified that the U.S. government was not considering taking a stake in Critical Metals Corp. Ordinary Shares(CRML.US), causing the company’s stock to retreat from an earlier 109% gain to close up 45%. This highlights the uncertainty of betting on rumors.

TD Cowen analysts have compared the current market behavior to the frenzy surrounding MEME stocks in the past. They warned that most of the gains from such stocks ultimately evaporated. The analysts expressed concerns that if government investments fail to materialize or prove ineffective in helping companies grow, mining stocks could face a similar fate.

One analyst further noted: "This is largely speculative at the moment, especially among retail investors who tend to follow capital flows and market momentum. Once the momentum stalls, you could very well see the opposite reaction."

Do you believe betting on policy-driven stocks carries significant risks?