Nucor fell hard on Thursday night and held those losses through Friday, losing roughly 6% after issuing Q3 2026 guidance of $5.55 to $5.65 per diluted share, landing about 5% below the FactSet consensus of $5.87. Steel Dynamics followed, guiding Q3 to $5.34 to $5.38 per diluted share, also below the analyst estimate of about $5.60. Both stocks had been up on the year by significant margins, so the reaction made sense on the surface. Below the surface, a different picture emerges.

The guidance shortfall is almost entirely a function of two items that inflated Q2 and cannot repeat. Q2 results benefited from a $61 million non-cash gain related to Nucor’s Helion investment and $130 million in cash refunds on prior raw material procurement costs. Strip those out, and Q3’s midpoint of $5.60 is a sequential improvement over Q2’s adjusted $4.84. This is earnings growth, not a warning sign.

The Business Is Accelerating

Third quarter earnings are expected to rise in the steel mills and steel products segments, driven by higher average selling prices, stable or higher volumes, and higher realized pricing, while the raw materials segment is expected to see lower earnings on weaker pricing and shipments. That last part, lower scrap prices, is actually a tailwind for an electric arc furnace producer because it can widen metal spreads. The raw materials segment headwind is the flip side of the same coin.

Q2 results were outstanding: $10.4 billion in revenue, up 23% year over year, with record steel mill shipments. Nucor saw steel mill shipments reach 7.1 million tons in Q2, a record high, with shipments climbing 10% from a year ago. That volume strength is carrying forward.

Why Wall Street Is Paying Attention

The U.S. steel market benefits from tight domestic supply and trade protections, with solid demand supporting pricing power. Section 232 steel tariffs are currently set at 50% on steel articles and derivative steel articles, which has reduced import pressure and helped domestic producers maintain favorable pricing and margins. Nucor, as North America’s largest steelmaker with operations concentrated domestically, is the most direct beneficiary of that structure.

Customer order activity remains strong, while persistently low customer inventories continue to support favorable pricing conditions. Steel demand remains solid across non-residential construction, energy, automotive, and industrial markets. When customers carry thin inventories into a seasonally strong shipment quarter, that combination historically drives reorder urgency, not demand deterioration.

Nucor has repurchased about 2.03 million shares in Q3 at an average price of $247.04 and has returned approximately $1.36 billion to stockholders year-to-date via share repurchases and dividends. A $4 billion buyback authorization is active, and the company is using the dip to reduce its share count.

What Could Go Wrong

The bear case is real and deserves respect. Berkshire Hathaway reduced its exposure to Nucor by about 52% in Q2, with NUE now accounting for roughly 0.1% of the portfolio. Berkshire is not a typical seller, and the signal from that reduction should not be dismissed entirely, even if the position was never large. Tariff durability is the larger risk: reports that the U.S. and Canada have discussed a deal that could relax U.S. tariffs on some Canadian steel and aluminum periodically rattle the sector, and any formal rollback of Section 232 protection would compress margins materially.

Valuation claims vary by data provider and move daily, so it is better to frame the point simply: even after the pullback, the stock is not obviously cheap by the standards of a commodity producer late in a cycle. Execution risk on the new West Virginia sheet mill also lingers. New capacity from the West Virginia sheet mill and Towers & Structures facilities will drive volume growth, and 2027 is widely expected to be a ramp-up year for the West Virginia facility before operations normalize.

The Bottom Line

Nucor’s Q3 guidance disappointed Wall Street’s model, not its business. Analysts largely described the guidance as conservative rather than alarming, with the fourth quarter expected to benefit from pricing lags and tightening steel demand. A stock down roughly 6% on a guidance miss that is mostly explained by non-recurring Q2 items, in an industry shielded by 50% import tariffs and supported by lean customer inventories, warrants a serious look. The risks are genuine but they were present before Friday’s drop. NUE is the stock to watch here.