Every quarter, institutional investment funds managing more than $100 million are required to file a form 13F with the Securities and Exchange Commission (SEC). These disclosures itemize which stocks the biggest names on Wall Street bought and sold during the most recent quarter.
There is, however, a catch. From time to time, firms can request that certain positions remain temporarily confidential -- usually if the stake has not yet crossed a material threshold, such as 5% ownership. In those cases, the public does not know the exact stock until the SEC requires a disclosure.
Warren Buffett's Berkshire Hathaway has used this strategy before -- doing so earlier this year, in fact. Investors knew that Berkshire was buying something, but the identity of the stock remained a mystery. Based on some breadcrumbs, I predicted the secret stock might be Caterpillar. While I did not get the company exactly right, I was in the ballpark in terms of industry.
Image source: The Motley Fool.
Berkshire's latest 13F revealed that the secret stock was steel company, Nucor (NUE 1.09%). Now that Berkshire's cards are on the table, the real question becomes: What makes Nucor so compelling right now -- and could it even be a stealth artificial intelligence (AI) stock hiding in plain sight?
Betting on America in the AI era
There is more to the AI revolution than chips and software. Before GPUs and cooling systems ever make it into a data center, those facilities need walls, concrete, beams, transmission lines, copper -- and above all, steel. Put simply, the backbone of AI infrastructure rests on raw materials long before servers and networking gear arrive. That's why I view steel stocks like Nucor as foundational to the AI narrative.
The U.S. government understands this, which is why steel is quietly emerging as a critical piece of the AI buildout. Take Project Stargate -- the $500 billion data center initiative backed by Oracle, OpenAI, and SoftBank. While it's an explicit bet on chips, it's an implicit bet on infrastructure and materials.
Add in President Trump's push to make America more self-reliant in industries like steel, and you can begin to connect the dots to why Buffett gravitated toward Nucor. After all, he's repeatedly said he'll never bet against American resiliency.
A masterstroke in contrarian investing
Most investors have plowed into the obvious beneficiaries of AI: Nvidia for chips, Palantir Technologies for software, and nuclear energy stocks as the grid strains under AI's soaring power demands.
As a contrarian, of course Buffett didn't chase the frothy AI trade. Instead, the Oracle opted for something far less flashy: steel.
With Nucor, Buffett isn't betting on a cyclical commodity business. He sees steel for what it truly is: a strategic national security asset serving as the literal building block for a multi-trillion dollar infrastructure wave. From data centers and robotics to autonomous vehicles and power plants, steel is a supporting layer that makes the AI revolution physically possible.
Is Nucor stock a buy right now?
At 18x forward earnings, Nucor isn't trading for the deep discount that value investors like Buffett typically capitalize on. On the surface, the stock may even look a bit pricey compared to historical valuation levels. I think this view is narrow and misses some broader ideas, though.
NUE PE Ratio (Forward) data by YCharts
While some investors may be hesitant on steel and other commodity names amid new tariff headwinds, Nucor stands apart. Indeed, the company imports some of its raw materials and therefore is not entirely immune from trade policy.
However, Nucor's scale and domestic footprint still provide a relative advantage over its global peers.
More importantly, the company is aligned with secular demand drivers -- data center construction, grid expansion, and reshoring of U.S. manufacturing -- that should support long-term growth.
Buffett's preference for resilient businesses underscores Nucor's role as a business facing some near-term pressure, but ultimately remains strategically positioned to lead America's industrial future in the long-run.
For these reasons, Nucor looks like a quality opportunity capable of generating long-term growth for patient investors seeking opportunities adjacent to the usual suspects fueling AI euphoria.
