Nucor Corporation (NUE): A Bull Case Theory

We came across a bullish thesis on Nucor Corporation on r/Valueinvesting by ahlornjtvn139. In this article, we will summarize the bulls’ thesis on NUE. Nucor Corporation's share was trading at $174.39 as of January 16th. NUE’s trailing and forward P/E were 24.49 and 15.22 respectively according to Yahoo Finance.

Nucor Corporation engages in the manufacture and sale of steel and steel products. NUE’s current share price of around $173 reflects a premium driven by strong December guidance, but the investment case remains compelling through 2026, with more attractive upside on a potential pullback into the $150–160 range. As the largest U.S. domestic steel producer, Nucor benefits from a highly efficient, scrap-based production model that recycles iron scrap through Electric Arc Furnaces, supplemented by Direct Reduced Iron made from iron ore pellets sourced under long-term contracts.

0This flexibility allows Nucor to produce a wide range of products, from rebar to premium advanced high-strength steel, while maintaining cost discipline and operational agility. Electric Arc Furnaces efficiency has been a key differentiator, enabling Nucor to closely match utilization with demand and avoid the fixed-cost pressures that have hurt less flexible competitors.

Demand fundamentals remain robust, with a materially higher backlog year-over-year, including strong growth in rebar and joists and decks, while limited exposure to the weaker automotive sector reduces downside risk. Structural tailwinds from data center construction, grid expansion, and infrastructure investment are expected to drive incremental steel demand, with Nucor well positioned to capture the majority of this growth. Near-term earnings may appear soft due to planned maintenance at Direct Reduced Iron facilities, but this is cyclical and should normalize margins as plants return online.

The balance sheet is strong, with ample liquidity, moderate leverage, and ongoing capital returns through buybacks. Strategic investments, including exposure to small modular reactor technology, highlight longer-term cost reduction and optionality. While valuation appears modestly elevated today, a temporary earnings-related pullback could offer an attractive entry point ahead of a favorable multi-year supply and demand setup.

Previously, we covered a bullish thesis on Nucor Corporation (NUE) by TravelingTramp in October 2024, which highlighted the company’s strong free cash flow generation, resilient balance sheet, consistent ROIC, and long track record of shareholder returns through dividends and buybacks. NUE’s stock price has appreciated by approximately 10% since our coverage due to improved guidance and stronger demand visibility. ahlornjtvn139 shares a similar view but emphasizes operational flexibility, data center-driven demand, and valuation timing.

Nucor Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held NUE at the end of the third quarter which was 47 in the previous quarter. While we acknowledge the potential of NUE as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.