Scott Bessent is buying US stocks with taxpayer cash amid China threat — can you copy and get rich? Here’s what he likes

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government has invested billions of taxpayer dollars over the past year to acquire stakes in companies it believes are strategically important to competing with China. The investments span industries including semiconductors, rare earths, lithium and quantum computing, and represent a departure from traditional industrial policy, with Washington increasingly taking direct ownership stakes instead of relying primarily on grants, loans and tax incentives. Treasury Secretary Scott Bessent explained the administration's reasoning during a CNBC interview (1) last year.

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In late July, the federal government's largest and most prominent holdings include a ⁠9.9% stake in Intel (2) obtained through $11.1 billion in previously authorized funding and an approximately ⁠15% stake in MP Materials (3), which operates the only active rare earths mine in the U.

S. Washington has also acquired stakes in Lithium Americas and its Thacker Pass project, Trilogy Metals, USA Rare Earth and several other businesses. But back in 2025, Bessent cautioned that the government must be "very careful not to overreach" and should regularly examine whether each investment has accomplished its intended goal.

So, is it working? The early results appear to be mixed. Government backing has helped attract attention to some companies, and the announcement of potential federal stakes produced immediate stock-market reactions for Lithium Americas, for example, whose stocks ⁠surged after reports emerged that Washington was considering an equity stake (4).

But rising share prices do not necessarily mean the broader strategy has succeeded. The ultimate test is whether these investments create durable U.S.

supply chains and reduce dependence on China. Despite tens of billions of dollars in federal support for nearly 150 mineral companies, ⁠Reuters reported on July 27 (5) that domestic mining and refining capacity remains far short of what American manufacturers and defense contractors need. Story Continues That makes it too early to determine whether taxpayers will ultimately profit or whether the strategy will achieve its national-security goals.

For investors, however, Washington's choices provide a clear indication of the companies and industries the administration considers strategically important. Corporate earnings and interest rates remain important, but government policy, geopolitics and national security priorities are increasingly influencing where capital flows. Understanding those forces may become just as important as analyzing a company's balance sheet.

Stay ahead of policy-driven market shifts Washington's investments may offer clues about which industries could receive favorable policies, federal contracts or additional financial support. But that doesn't mean every company operating in those sectors will prove to be a good investment. Investors still need to examine factors such as a company's finances, competitive position and growth prospects before buying its shares.

That can be difficult when government announcements can artificially inflate a stock's value, not to mention geopolitical developments and market reactions unfolding simultaneously. ⁠Moby offers expert research and recommendations to help you identify strong, long-term investments backed by advice from former hedge fund analysts. Instead of spending hours digging through financial news, earnings reports and market data, Moby's team does much of the heavy lifting for you.

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That research can help investors stay on top of changing market conditions while reducing some of the guesswork behind choosing stocks and ETFs. Even if you're new to investing, Moby's reports are designed to be approachable, allowing you to become a ⁠smarter investor in just five minutes. Read More: Millionaires under 43 hold only 25% of their wealth in stocks.

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