Nucor's Shares Rally 50% In 6 Months: What's Driving The Momentum?

Nucor Corporation’s NUE shares have gained 50.1% in the past six months. The company has also outperformed the Zacks Steel Producers industry’s 41% rise over the same time frame. 

The gains partly reflect Nucor’s strong earnings in the second quarter on Steel Mills segment’s strength and an upbeat outlook for the third quarter. NUE is benefiting from healthy demand in key markets, actions to expand its production capabilities and higher steel prices. 
 

Image Source: Zacks Investment Research

Let’s take a look into the factors that are driving NUE stock.

Expansion Actions & Acquisitions Aid Nucor Stock

Nucor remains committed to boosting production capacity, which should drive profitable growth and strengthen its position as a low-cost producer. It is executing a series of growth projects to tap significant end-market demand. Nucor is seeing strong demand from non-residential construction & infrastructure, military & defense, and energy end markets and has a healthy order backlog. The company has already commissioned some of its growth projects with Gallatin and Brandenburg mills, showing strong production and shipment performance.

The construction of the 3,000,000 tons per annum (tpa) sheet mill with a low-cost profile in West Virginia, the company’s biggest ongoing project, is expected to be completed in late 2026 within production expected in 2027. The new 500,000 tpa galvanizing line at the Berkeley County sheet mill in South Carolina is also on track. Its third greenfield project in Utah is also on course for production commencement in 2027.

The company has been focusing on growth through strategic acquisitions over the past several years. The recent acquisition of Southwest Data Products expanded its growing portfolio of solutions for data center customers. The buyout of Rytec Corporation will also allow Nucor to further expand beyond its core steelmaking businesses into related downstream businesses. Adding high-performance doors is expected to create cross-selling opportunities with other Nucor businesses and significantly expand its product portfolio for the commercial space.

Higher Steel Prices Drive NUE’s Margins

Higher U.S. steel prices have created a favorable landscape for American steel producers. U.S. steel prices recovered in the fourth quarter of 2025, following the lows seen in the third quarter, and the momentum continues so far this year. Overall demand weakness and abundant steel mill output dragged benchmark hot-rolled coil (“HRC”) prices below $800 per short ton in late August 2025 and continued through early September. 

HRC prices rebounded on major steel mills' price increases, extending lead times and tightening supply, partly due to plant outages and reduced imports driven by tariffs. The recovery, which has been more pronounced since November, has led to HRC prices surging to above $1,300 per short ton lately. With end-market demand remaining high, steel prices will likely continue to climb, benefiting U.S. steelmakers, including NUE, with higher profit margins.

Upbeat Outlook Adds to Optimism

NUE recently announced its guidance for the third quarter of 2026. Earnings are projected to increase sequentially, supported by higher selling prices in the Steel Mills segment and higher volumes and higher average realized pricing in the Steel Products segment. 

The company projects earnings for the quarter to range between $5.55 and $5.65 per share. Nucor reported net earnings per share of $5.04 and adjusted net earnings of $4.84 in the second quarter of 2026. Earnings were $2.63 per share in the third quarter of 2025.

Nucor anticipates improved sequential results due to higher earnings in its Steel Mills and Steel Products segments, partially offset by weaker performance in Raw Materials. The Steel Mills segment is expected to benefit from higher average selling prices and stable volumes.

NUE’s Zacks Rank & Key Picks

NUE currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Basic Materials space are Ternium S.A.  TX, Innospec Inc. IOSP and Avient Corporation AVNT. TX currently carries a Zacks Rank #1 (Strong Buy), while IOSP and AVNT carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Ternium’s current-year earnings stands at $6.54 per share, implying a 201.4% year-over-year increase. The consensus estimate for TX’s current-year earnings has moved up 14.5% over the past 60 days. 

The Zacks Consensus Estimate for IOSP’s current-year earnings has moved up 3.9% over the past 60 days. Its earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, with the average surprise being 12.9%. 

The Zacks Consensus Estimate for AVNT’s current-year earnings is pegged at $3.2 per share, indicating a 13.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, with the average surprise being 3.4%.

Beyond Nvidia: AI's Second Wave Is Here

The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research