In this article, we will be taking a look at the 7 Best Rare Earth Stocks to Buy According to Hedge Funds.
By 2026, the mining industry, particularly in the context of rare earths, will have evolved from a basic extraction sector into a strategic pillar of national security. The global rare earth metals market was valued at approximately $5.73 billion as of 2025 and is projected to reach $7.79 billion by 2030, primarily driven by the green energy transition. Offshore direct-drive wind turbines require approximately 400–600 kilograms of rare-earth permanent magnets per megawatt.
The United States has made significant progress in reducing its historical reliance on foreign processing, which once exceeded 90%. The Mountain Pass Mine in California remains the core domestic hub, with MP Materials reporting a 51% year-over-year increase in NdPr oxide production in Q3 2025. The U.S. rare earth market reached $82.7 million in 2024 and is growing at 9.5% annually, targeting $135 million by 2030.
Geopolitical instability, including U.S. military actions in South America in early 2026, has fueled investor interest in domestic rare earth supply chains. The industry is shifting toward onshore refining and magnet manufacturing, with MP Materials commissioning a heavy rare earth separation facility in mid-2026 and a DoD-backed mine-to-magnet plant scaling up in Texas.
Geopolitical concerns, particularly the strategic risk posed by China’s dominant position in rare earth refining, have fueled investor interest in domestic rare earth supply chains. The industry is shifting toward onshore refining and magnet manufacturing, with MP Materials entering a multibillion-dollar public-private partnership with the Department of Defense to expand separation and magnet production capabilities. MP Materials’ Independence magnetics facility in Texas has begun producing rare earth metals and magnets, and ongoing efforts continue to build out heavy rare earth processing and a more resilient U.S. supply chain.
A mining operation. Photo by Tom Fisk on Pexels
Our Methodology
We began by identifying mining companies with exposure to rare earth metals. Using several mining-focused ETFs as our initial screening universe, we shortlisted ten stocks that exhibited positive upside potential. These companies were then ranked in ascending order based on the total number of hedge fund holders as of Q3 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Here is our list of the 7 best rare earth stocks to buy according to hedge funds.
7. American Resources Corporation (NASDAQ:AREC)
Number of Hedge Fund Holders: 4
American Resources Corporation (NASDAQ:AREC) is among the best rare earth stocks.
TheFly reported on January 5, 2026, that AREC announced that its subsidiary, ReElement Technologies, has entered a strategic partnership with Transition Equity Partners (TEP). Under the agreement, TEP committed a $200 million equity facility to support the commercial deployment of ReElement’s multi-mineral refining platform. The capital will be used to scale the Marion, Indiana, facility to over 10,000 metric tons per annum (MTPA) of refined critical minerals and to fund additional refining sites in the United States and select international markets. The partnership is intended to accelerate ReElement’s growth in the critical minerals sector, strengthening its position in the global market.
Separately, on December 8, 2025, American Resources Corporation (NASDAQ:AREC) announced a partnership with SAGINT to implement blockchain-based tokenization, creating digital warehouse receipts for ReElement’s refined minerals. This system provides real-time, auditable provenance for defense and government customers.
American Resources Corporation (NASDAQ:AREC) extracts and refines critical raw materials for electrification and infrastructure. Through ReElement Technologies, it uses a proprietary chromatography process to produce rare earth elements and battery minerals from recycled and mined sources with a lower environmental footprint than traditional methods.
6. NioCorp Developments Ltd. (NASDAQ:NB)
Number of Hedge Fund Holders: 18
NioCorp Developments Ltd. (NASDAQ:NB) is one of the best rare earth stocks on our list.
TheFly reported on January 7, 2026, that Freedom Capital Markets analyst Vitaly Kononov initiated coverage on NB with a Buy rating and a price target of $8.70. Following the announcement, NB’s stock jumped approximately 6%, reaching an intraday high of $6.86.
Freedom Capital Markets initiated coverage on NioCorp Developments Ltd. (NASDAQ:NB) with a Buy rating, citing strong government support, high-quality Elk Creek assets, and long-term revenue visibility. The rating follows NB’s shift from exploration to development, including the Mine Portal Project (construction beginning Q1 2026) and the acquisition of FEA Materials LLC assets, which strengthens vertical integration in aluminum-scandium alloy production.
NioCorp Developments Ltd. (NASDAQ:NB) is a U.S. critical minerals development company focused on advancing the Elk Creek Critical Minerals Project in southeast Nebraska. The company is developing what is expected to become one of North America’s most significant sources of strategic minerals, including niobium, scandium, titanium, and potentially rare earth elements such as neodymium, praseodymium, terbium, and dysprosium.
5. Critical Metals Corp. (NASDAQ:CRML)
Number of Hedge Fund Holders: 20
Critical Metals Corp. (NASDAQ:CRML) is among the best rare earth stocks.
TheFly reported on January 7, 2026, that CRML officially announced the commencement of construction for a multi-use storage and pilot-plant facility in Qaqortoq, Greenland. This project is a critical infrastructure milestone for the Tanbreez project, intended to support pilot-plant operations, core handling, and technical work programs.
The facility is being built under a full turnkey contract awarded to 60° North Greenland, covering everything from engineering and permitting to logistics and commissioning. Specifically designed for Arctic conditions, the pilot-plant section is scheduled to be “ready for use” on or before May 2026. In conjunction with the build, the company also completed the purchase of a residential property in Qaqortoq to serve as its local operational base.
Critical Metals Corp. (NASDAQ:CRML) is a mining exploration and development company focused on discovering and advancing critical minerals and rare earth elements that are essential for high-tech, clean energy, defense, and electronics industries. Its flagship asset is the Tanbreez Rare Earth Project in southern Greenland, which is considered one of the world’s significant rare earth deposits with a relatively high proportion of heavy rare earth oxides.
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