Tom Yeung here with your Sunday Digest.
In 2008, Citigroup Inc. (C) was in trouble.
The bank had poured billions into mortgage-backed securities, and these complex instruments were now blowing up in their faces. The firm even became the poster child of foolish Wall Street risk-taking after its CEO, Chuck Prince, tried to defend his bank’s actions by quipping, “as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”
The U.S. government knew the bank had danced its way into disaster. In October 2008, the U.S. Treasury injected $25 billion into the struggling bank through the taxpayer-funded Troubled Asset Relief Program (TARP). Then in November, they fired their financial bazooka.
Under a specially negotiated agreement, the government took a 36% stake in Citigroup in exchange for backing roughly $306 billion in loans and investing over $20 billion in warrants and stock.
The massive deal worked.
Over the following two years, Citigroup’s finances stabilized and its share price shot back up. The government exited their position in 2010 with $12 billion in profits, and those who hung on would have made 1,000% returns or more.
That’s because government support can work wonders. When a well-funded administration pours money into a company with a plan, history tells us to expect success.
Consider…
- Sweden’s saving of Nordbanken in 1992,
- South Korea’s backing of the Hyundai Group’s takeover of Kia in 1998,
- And Japan’s rescue of Japan Airlines in 2010.
After all, government budgets are massive compared to corporate ones. Official backing also makes it easier for companies to steamroll competition, as Saudi Aramco and China’s “Big 4” banks have done.
That’s precisely why InvestorPlace Senior Analyst Louis Navellier is so bullish about Executive Order #14196, a presidential directive that’s set to pour trillions more dollars into American corporations in the coming years. In a series of special reports, he explains why September 30 is shaping up to be a crucial date for that executive order and the U.S. economy, and highlights five stocks he believes are poised to surge 1,000% due to that concurrence of events.
You can learn how to access those reports here.
I must emphasize that Louis’ timing is crucial. Last week, I introduced four companies primed to receive more government funding. And I was a bit prescient on one of them – Energy Fuels Inc. (UUUU) received a congressional visit last Tuesday.
Here is how UUUU and the others have performed this past trading week:
- Intel Corp. (INTC): +14%
- Uranium Energy Corp. (UEC): +9%
- Energy Fuels Inc. (UUUU): +15%
- Ondas Holdings Inc. (ONDS): +17%
However, the window is closing quickly. So, in this update, I’d like to share two more firms that illustrate the power the U.S. government has to become a kingmaker, and why Louis is so concerned about getting in now.
America’s Bet on Lithium
In July, I wrote about how AI data centers were triggering a resurgence in global lithium prices. These cloud computing sites require enormous amounts of backup power, and their operators have turned to almost every imaginable technology to fill that need. That includes lithium-ion batteries, a technology the Trump administration has historically downplayed.
As a result, I recommended shares of Lithium Americas Corp. (LAC). Here’s what I said at the time (highlights added):
This mining startup is currently constructing a mine at Thacker Pass, Nevada – one of the world’s largest lithium assets. Once complete, the site could produce 160,000 metric tons of lithium annually – twice as much as Albemarle is allowed to extract from its Chilean assets…
Most importantly, Lithium Americas will be a pure play on U.S. lithium production – an industry that could surge as U.S. regulators add tariffs on AI-based metal imports.
Since then, the U.S. government has done one better: It’s signaled it may allow a massive $2.26 billion loan to support Lithium Americas’ Thacker Pass mine. Investors previously feared that the Biden-era loan would get canceled by the current administration.
In addition, the Trump administration might also seek an equity stake of as much as 10% in Lithium Americas.
“Thacker Pass is seen as a linchpin in building a domestic supply chain part of Washington’s long-standing drive to boost U.S. production of lithium,” according to Reuters in its exclusive coverage of the government’s potential investment in LAC. “The project has long been touted by both Republicans and Democrats as a key way to boost U.S. critical minerals production and cut reliance on China, the world’s largest lithium processor.”
That would almost guarantee completion of the Thacker Pass mine, since the government would no longer have a financial or political reason to stop the project. Why own 10% of a project that you plan to suspend?
That’s already sent shares of LAC up 145% since I recommended it in July. But if history is any guide, that’s likely just the start. Lithium Americas is sitting on one of our country’s most valuable deposits of natural resources. And now the government is showing interest in buying in.
So, I’m re-suggesting the stock to those who have not yet invested.
The More Speculative Play
Over the past several months, China has used its near-monopolistic position in rare earth metals as a bargaining chip in trade negotiations. These essential metals are found in everything from electric motors to LED displays, and a near-ban on Chinese exports last April may have helped bring the U.S. back to the negotiating table.
Now, it’s important to know that rare earth materials are not that rare. The most abundant of these, cerium (a metal used in catalytic converters), is as common as copper. Even the rarest of these metals (thulium and lutetium) are more plentiful than gold.
In fact, America has at least a half-dozen rare earth mines under development, including:
- Round Top (Texas)
- Bear Lodge (Wyoming)
- Bokan Mountain (Alaska)
- Elk Creek (Nebraska)
- La Paz (Arizona)
Indeed, shares of rare earth miners have done well following the Trump administration’s $400 million investment in MP Materials Corp. (MP), the company behind California’s Mountain Pass rare earths mine. Not every site has high enough concentrations of rare earths to make mining profitable, so these rare earth miners are still quite valuable. USA Rare Earth Inc. (USAR) has surged 62% since I recommended it in July on the expectation of even more deals.
However, the biggest prize of rare earths may come from the processing and separation of these metals. After all, even though there’s more cerium in the earth’s crust than copper, the former is 1,400 times more expensive because its ores are so impure. Miners consider themselves fortunate to find rare earths with more than 4% purity.
In addition, most ores contain multiple rare earth elements. Miners require special processing to separate cerium from lanthanum, and so on. It’s a complex operation that requires specialized machinery and know-how that disappeared a decade ago when America’s last rare earths processor closed its doors.
In fact, that’s how China keeps such a tight grip on rare earths. Even though the country only mines 60% of the world’s rare earths, its near-90% market share in rare earths processing is why we think of China as the world’s rare earth monopolist.
That’s what makes Ucore Rare Metals Inc. (UURAF) so interesting. This early-stage startup is now seeking to bring commercial-scale rare earth separation back to North America.
In 2020, Nova Scotia, Canada-based Ucore acquired Innovation Metals Corp., a startup working on a rare earths separation technology called RapidSX. The technology had been successfully tested at the pilot scale, and Ucore was interested in commercializing it in North America. In 2023, they received a $4 million award from the U.S. Department of Defense (DoD) to continue development, followed by another $4 million funding agreement from the Canadian government.
Progress has since sped up. In May 2025, Ucore secured an $18.4 million funding agreement with the DoD for the construction of a commercial-scale rare earth processing plant in Louisiana. The site is now in its second phase of construction, and production could begin as soon as mid-2026.
That said, there are many “if’s” surrounding Ucore. The company remains dependent on outside funding for now, given its relatively weak balance sheet. There’s also no guarantee that its RapidSX system will produce results at scale… or if the U.S. government will continue to bankroll a company that’s headquartered in Canada.
In addition, its primary listing is on the Toronto Stock Exchange, so most investors will find themselves transacting an illiquid over-the-counter version of that stock that’s trading at a massive premium to book values. And so, I am not making UURAF an official recommendation.
Nevertheless, investors with access to Canadian markets may want to consider a small investment in this high-potential firm. America’s government has already invested $400 million into MP Materials, a miner with limited processing capacity. And so, it’s not difficult to see the federal government also putting more cash into Ucore, raising a high price tag even further.
The Risks of a Government Shutdown
Lithium Americas and Ucore are both high-risk plays that depend on government support. They need regulatory approvals to move ahead.
It’s the type of risk that not every investor is comfortable with. And if the government shuts down on September 30, that could put a freeze on new federal contracts, sending shares of these risky firms into a spiral.
But not every firm receiving federal dollars is so risky.
In a recent free presentation, Louis Navellier highlights five firms already posting record profits — companies with the strength to thrive with or without government aid. In fact, a federal shutdown separates the strong from the weak, creating opportunities for investors who position themselves correctly.
Until next week,
Thomas Yeung, CFA
Market Analyst, InvestorPlace
