We recently published a list of 10 Best Steel Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Gerdau S.A. (NYSE:GGB) stands against other best steel stocks to buy according to billionaires.
The steel sector remains vital to global infrastructure and manufacturing, and continuous growth is expected. The Business Research Company reported that the steel processing market is expected to grow from $714.7 billion in 2024 to $733.2 billion in 2025 at a CAGR of 2.6%. This growth depends on industrial expansion, infrastructure investments, and demand from the construction, automotive, and energy sectors. Furthermore, innovations in steel alloys, smart infrastructure, and a shift toward electric vehicles (EVs) will drive future growth. This bright future projection comes on the back of a strong sector performance in the recent past.
The steel sector has delivered an 8.92% year-to-date (YTD) return, beating the broader market’s decline of over 4%. This shows investor trust and confidence amid infrastructure investments and solid demand. Furthermore, according to the World Steel Association, the automotive sector drives 12% of global steel demand. The shift to electric vehicles has boosted demand for lightweight, high-strength steel. S&P Global Mobility expects battery EV sales to reach 15.1 million units in 2025, up 30% from 2024, making up 16.7% of light vehicle sales. Due to higher steel consumption, this trend is expected to benefit steel producers investing in advanced materials.
However, decarbonization remains crucial, as steelmaking causes 7% of global greenhouse gas emissions, according to a report by PwC. Stricter rules are pushing producers toward greener methods, and by 2040, at least 25% of the global steel capacity is expected to be decarbonized. Coal-based furnaces are at risk of becoming stranded assets, with potential losses of up to $518 billion. Thus, many companies are switching to electric arc furnaces (EAFs), which can be carbon-neutral with renewable power. Furthermore, according to Research and Markets, the global steel scrap market, sized at 543.2 million metric tons in 2024, should reach 727.1 million metric tons by 2030 at a CAGR of 5.0%. Recycling 1,000 kg of steel saves 1,400 kg of iron ore, 740 kg of coal, and 120 kg of limestone. Thus, steel recycling drives sustainability by cutting energy use and consumption of raw materials.
Moreover, government policies continue to shape the industry, such as Trump’s 25% tariff on steel and aluminum imports. This was aimed at helping U.S. manufacturers but raised costs and impacted prices across consumer and industrial goods. Recently, a 25% tariff was imposed on Mexican steel melted and poured outside North America to target transshipments.
While regulations and trade policies will affect costs, the steel industry is set for growth in 2025, backed by infrastructure spending, automotive demand, and green investments. The ability to innovate and adapt to decarbonization will be key to driving long-term success.
Methodology
To curate a list of the 10 Best Steel Stocks to Buy According to Billionaires, we analyzed Insider Monkey’s exclusive database of billionaire stock holdings. We selected the 10 best stocks to buy based on the highest number of billionaire investors, updated as of Q4 2024. For the stocks with the same number of billionaire holdings, we have used the total value of billionaire holdings as a secondary metric to rank the stocks.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A steel worker in high-visibility gear standing in front of a vast array of steel products.
Gerdau S.A. (NYSE:GGB)
Number of Billionaire Investors: 8
Gerdau S.A. (NYSE:GGB) is a global steel producer with operations spanning Brazil, North America, and South America. The company makes semi-finished steel items, long-rolled steel, flat steel, and specialty steel for the building, automotive, energy, mining, and infrastructure industries. Simultaneously, Gerdau is focusing on sustainability by boosting its clean energy output to help reduce carbon emissions.
For the year ended December 31, 2024, Gerdau S.A. (NYSE:GGB) reported an adjusted EBITDA of roughly $2.16 billion, fueled by strategic cost reductions, mainly in Brazil. The company saved about $300 million while keeping a healthy balance sheet and investing around $1.24 billion in capital projects. Stockholders received strong returns with nearly $580 million paid through dividends and stock repurchases.
Gerdau S.A. (NYSE:GGB) continued growing its energy business by buying two small hydropower plants in Brazil to trim costs and support long-term green goals. The company has also streamlined its financial reporting into three segments: Brazil, North America, and South America, to match market patterns more effectively.
Going forward, Gerdau S.A. (NYSE:GGB) expects improved demand in North America, backed by commercial construction and infrastructure work. The company foresees higher use of its U.S. facilities due to trade protections, including a 25% steel import tariff.
Therefore, Gerdau S.A. (NYSE:GGB) is well-placed for future growth with its cost-effective structure and smart investments, making it one of the best steel stocks.
Overall, GGB ranks 7th on our list of best steel stocks to buy according to billionaires. While we acknowledge the potential of GGB, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GGB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.