Nucor: Berkshire Hathaway's Quality Bet Is No Fluke

Nucor's success is a result of Berkshire Hathaway's bet on quality, which is not a fluke. The steel sector has seen a resurgence in the US due to onshoring production and reversing de-industrialization. Nucor's focus on quality and efficiency has helped it thrive in this trend, making it a leader in the industry. Berkshire Hathaway's investment in Nucor reflects its confidence in the company's strategy and potential for long-term growth.

On August 19, 2025, Nucor Corporation (NUE) saw its stock rise by 0.87% following disclosures by Warren Buffett’s Berkshire Hathaway in its Q2 13F filing. The investment, valued at $850 million, was acquired in Q1 2025, boosting Nucor's stock price despite broader industry challenges [1].

Nucor's strategic positioning as a supplier of steel components for data centers, a critical infrastructure for AI development, positions it to benefit from U.S. tariffs and AI infrastructure growth. Despite industry margin pressures, Nucor's exposure to AI-driven demand and potential benefits from U.S. steel tariffs could support its long-term outlook [1].

Berkshire Hathaway's purchase of Nucor aligns with its recent focus on U.S.-based commodity companies with growth potential. While Nucor's earnings have declined year-to-date due to cost pressures, its forward P/E ratio of 17.5 remains elevated. The market’s anticipation of tariff-driven pricing power and AI sector tailwinds may outweigh near-term operational headwinds. However, the stock’s valuation suggests investors are factoring in a premium for its role in emerging technology infrastructure [1].

The steel sector has seen a resurgence in the U.S. due to onshoring production and reversing de-industrialization. Nucor's focus on quality and efficiency has helped it thrive in this trend, making it a leader in the industry. Berkshire Hathaway's investment in Nucor reflects its confidence in the company's strategy and potential for long-term growth.

References:
[1] https://www.ainvest.com/news/warren-buffett-berkshire-hathaway-bets-850m-nucor-ai-infrastructure-demand-lifts-steel-giant-industry-struggles-stock-ranks-477th-0-2b-trading-volume-2508/