Nucor Corporation (NUE) | The Buildout — AI Infrastructure

The Verdict

Nucor turns scrap into steel, and then turns that steel into the products a construction site needs: sheet, plate and structural beams, plus joists, deck, tubing, racking and utility towers. Data centers and the power lines that feed them are built from that list, which is how the AI buildout reaches Nucor even though the company sells no computing equipment. Its exposure runs through data-center and grid construction rather than a single AI product line, and the company itself says it supplies data centers rather than being one.

Earnings Beat

Nucor reported Q2 2026 net sales of $10.40 billion, up from $8.46 billion a year earlier, with gross margin of 19.6% and EBITDA of $2.02 billion. Net earnings were $1.16 billion, or $5.04 per diluted share, exceeding the midpoint of guidance by $0.29; adjusted net earnings were $1.11 billion, or $4.84, excluding a $0.20 noncash Helion benefit. Steel mills shipped a record 7.1 million tons and pretax earnings rose more than 35% from Q1 to $1.6 billion, while Steel Products pretax rose more than $75 million to $353 million and raw materials came in at $146 million versus $45 million. Results included $130 million of cash refunds on prior-period raw material procurement costs that management says will not repeat.

Management tone: Management's tone shifted materially more bullish on demand between the Q1 and Q2 2026 calls. On the prior call, domestic demand was framed as flat to up 2% with pockets of strength; on the latest call, management described backlogs at or near records in almost every product group, structural consumption up approximately 15% this year, and a 2027 that 'could be a very special year.' They also tightened volume guidance to the higher end of the 5%–10% range. Against that, they were candid on the negatives: they flagged the non-repeating $130 million pig-iron refund before being asked, guided raw materials down for Q3, said start-up costs stay elevated through 2027, and declined to size multiyear upside such as border-wall share or DRI transfer-pricing mechanics.

Management Guidance

For full-year 2026, management guides shipment growth to finish closer to the higher end of its previously suggested 5%–10% range, industry demand growth of about 2%, capital expenditures of roughly $2.5 billion with about 60% going to growth projects, and returns of at least 40% of net earnings to shareholders; about 50% of the year's capital spending was already done at the midpoint. For Q3 2026 it guides higher consolidated earnings: steel mills higher even without the $130 million refund, on expanding metal margins and stable volumes; Steel Products higher on higher volumes and higher average realized pricing; and raw materials lower on lower expected realized scrap pricing and elevated iron ore costs from idled Middle East pellet capacity. Shipping days are 91 in Q3 and 89 in Q4, and the expected full-year effective tax rate is 20.0% to 22.0%.

Trajectory

Revenue is running at record levels. Net sales went from $9,496 million in Q1 2026 to $10,397 million in Q2, after $8,456 million in the year-ago quarter, and gross margin stepped from 14.5% a year ago to 19.6% as metal margins widened and utilization rose. EBITDA followed, from $1,417 million in Q1 to $2,012 million in Q2, and free cash flow swung from a $222 million use in the year-ago quarter to $829 million — which management called the strongest quarter since 2023. Two qualifications carry into the next periods: Q2 included the $130 million pig-iron refund that management says does not repeat, and preoperating and start-up costs of $120 million are guided to stay elevated through 2026 and throughout 2027 while West Virginia ramps.

The Model

The model projects FY+1 revenue of $40,373 million and EBITDA of $6,944 million (a 17.2% margin), then FY+2 revenue of $43,600 million and EBITDA of $7,848 million (an 18.0% margin). The near year anchors on management's own guide: shipment growth finishing closer to the higher end of the 5%–10% range, about $2.5 billion of capital spending with roughly 60% going to growth projects, and West Virginia moving through commissioning toward first commercial shipments. The second year leans on West Virginia shipping in early 2027 toward roughly 50% utilization by the end of its first year, on the Towers & Structures ramps including Utah full production in mid-2027, and on free cash flow inflecting higher as capital spending moderates.

Projections are the median of 5 independent model runs. The model’s revenue sits 9.9% above analyst consensus.

For full-year 2026, management guides shipment growth to finish closer to the higher end of its previously suggested 5%–10% range, industry demand growth of about 2%, capital expenditures of roughly $2.5 billion with about 60% going to growth projects, and returns of at least 40% of net earnings to shareholders; about 50% of the year's capital spending was already done at the midpoint. For Q3 2026 it guides higher consolidated earnings: steel mills higher even without the $130 million refund, on expanding metal margins and stable volumes; Steel Products higher on higher volumes and higher average realized pricing; and raw materials lower on lower expected realized scrap pricing and elevated iron ore costs from idled Middle East pellet capacity. Shipping days are 91 in Q3 and 89 in Q4, and the expected full-year effective tax rate is 20.0% to 22.0%.

What Could Go Right — and Wrong

Looking Ahead

The next twelve months turn on two dated items: completing West Virginia's commissioning by the end of 2026 and starting commercial shipments in early 2027, and delivering a third quarter in which steel mills earn more without the pig-iron refund. Along the way, Indiana Towers is guided fully operational in Q3 2026, Berkeley's second galvanizing line and the full Crawfordsville coating operation are slated to finish later in 2026, Alabama Towers is guided to EBITDA-positive later this year, and Utah Towers targets full production in mid-2027. Management also pointed to a Towers & Structures backlog disclosure 'in the coming weeks,' and to a USMCA annual review process alongside ongoing Section 301 investigations.

Financials

Annual Summary

Key Ratios (Trailing)

The Company

Nucor manufactures steel and steel products, and separately produces and procures the ferrous and non-ferrous materials that feed its own steelmaking. The 10-K describes it as North America's largest recycler, using scrap steel as its primary raw material. Its three reported segments are steel mills, which made up 62% of FY2025 sales to external customers and produce sheet, plate, structural and bar steel; steel products, which converts that steel into joists, deck, tubing, conduit, racking, fasteners, insulated panels and utility towers; and raw materials, which produces direct reduced iron and brokers and processes scrap. Nearly all operating facilities and customers are in North America.

The segments feed each other. Raw materials supplies the mills, and steel products converts the mills' own steel into downstream goods sold at higher revenue per ton. The 10-K plant table lists mills across the United States plus Silao, Guanajuato, Mexico, including Fontana, California at 4,020,000 tons of flat-rolled capacity, Blytheville, Arkansas at 2,220,000 tons of structural, and Hertford County, North Carolina at 1,350,000 tons of plate. Management described Nucor on the Q1 2026 call as producing 'roughly one out of every four tons of steel in the United States.' Customer concentration is low: the 10-K says its largest single customer was approximately 5% of 2025 sales.

Business Segments

Competitive Landscape

Nucor competes in a commodity industry its own 10-K calls over-supplied: 'Global steel production overcapacity continues to be an ongoing risk to Nucor and the entire steel industry.' Its pitch is breadth rather than cost. Management says Nucor can supply '95% of the steel' needed to build a data center, and on the border wall claims to be 'the only company with the raw materials, the sheet, the tube capacity and the logistics team.' Import competition is the live variable: finished steel imports fell 25% year over year and import share was about 15% in Q1 2026, while beam imports rose about 50% sequentially and management read that as a demand signal rather than a threat. The source material's own criticality read concludes that data-center construction would shift to other domestic steel producers if Nucor's products disappeared.

Supply Chain

Nucor buys scrap, iron ore, natural gas and electricity, melts steel in electric-arc furnaces, and sells to fabricators, service centers, utilities and data-center general contractors. No neighbor's latest earnings call mentioned Nucor by name, so the read-through comes through products and end markets.