While Eaton Corporation plc (NYSE:ETN) and Nucor Corporation (NYSE:NUE) operate in different industries, for Cramer, it’s all about the data center. He believes that Nucor’s exposure to the data center is underappreciated, and during his morning appearance on October 2nd, while Cramer advised against focusing on industrial stocks, he did carve out an exception for those with an exposure to the data center buildout:
“Well there, when you look at the industrials you have to divide between, data center industrials, and there I always like to look at Eaton, that’s the one that does electrification. And against that, I like to look at Nucor, which has some data center but really not known as a data center. And they’re both good, which is really excellent.”
While Cramer might believe the two stocks are worth it, neither made it on our list of the 10 Best Aggressive Growth Stocks to Buy According to Wall Street Analysts.
Looking at Eaton Corporation plc (NYSE:ETN)’s financials, Cramer’s optimism is warranted. During the second quarter, the firm reported a record $8.5 billion in revenue through posting 21% annual revenue growth. The growth was driven by the firm’s electrical business catering to the data center. This segment posted 85% annual revenue growth, which far outstripped the overall growth in the quarter. As if this weren’t enough, management revealed that its backlog sat at 307 gigawatts, which was equal to 15 years of construction at 2025 rates. Overall, the firm’s electrical backlog grew by 43% annually to provide long term visibility into its revenue. Naturally, the bullish front is quite rosy for Eaton.
However, with the shares up by more than 25% year-to-date and a forward P/E ratio of 27.6, execution has to be flawless for Eaton to sustain its valuation. The historical 5-year baseline median is 20.5x while the overall electrical equipment industry trades at a ratio of 21x. The stakes are high, since during the second quarter, the firm’s Mobility business saw its sales drop by 2% organically. Additionally, the business’s 90 basis point margin expansion was driven by an exit from lower margin business lines instead of an overall cost improvement.
For Nucor Corporation, the overall debate is about the cyclical downturn in the steel industry as higher tariffs have led to higher prices due to low supply and high interest rates have impacted the construction and other industries. Yet, the firm might be playing for the long run as its multi-year $15 billion to $20 billion capital program has started to yield results with the West Virginia Megaproject in particular expected to have a 50% utilization rate by 2027 end.
Not to mention, the spending appears to be tapering off, as Nucor will outlay $2.5 billion in capital expenditure in 2026 compared to the $3.4 billion peak in 2025. However, managing mega projects is tricky, and their massive output must be met by demand from sluggish sectors such as infrastructure. Like Cramer, Executive Vice President of Sheet Products, Noah Hanners, is optimistic as he remarked during the earnings call:
“Border fence, energy, data centers — these things are all consuming millions of tons and they’re not projects that are one-off in 2026. We expect multi-year demand out of some of these.”
Shifting to the valuation, Nucor trades at a forward P/E ratio of 11.44, which is significantly lower than the S&P 500’s 20.9x. The difference suggests that cyclicality is in play as investors are wary about a downturn in the market and its impact on the firm’s business. The ratio also suggests an earnings yield of 8.754% to indicate that profitability expectations are strong. In its Q2, Nucor’s earnings per share surged by 94% on the back of strong steel prices. Hedge fund interest in Eaton is higher, presumably due to the data center exposure. Insider Monkey’s data shows that 68 funds had disclosed a stake in Eaton in Q2 compared to 62 for Nucor.
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