1. Cleveland-Cliffs Inc. (NYSE:CLF)
Number of Hedge Fund Holders: 49
Analysts’ Upside Potential as of March 27: 46.3%
Cleveland-Cliffs Inc. (NYSE:CLF) is a vertically integrated steel manufacturer and iron ore producer primarily serving the North American market. The company operates across the entire steel production value chain, from mining iron ore and producing iron ore pellets to manufacturing flat-rolled steel, including hot-rolled, cold-rolled, coated, stainless, electrical, and specialty steel products. Its products are predominantly used by automotive manufacturers, construction firms, appliance makers, and other industrial sectors. CLF also provides steel tubing and customized steel solutions, maintaining significant market positions in the US automotive and industrial markets.
Cleveland-Cliffs Inc. (NYSE:CLF) is experiencing a significant market improvement in 2025, with order books and lead times reaching their strongest position in nearly a year, as lead times for hot-rolled steel increased from 3 weeks to 7 weeks. The company faced challenges in 2024 with the weakest steel demand since 2010, particularly impacted by slowdowns in the automotive, construction, and industrial production sectors. The recent implementation of 25% tariffs on steel imports from all countries is expected to benefit CLF, with the company appreciating the Trump administration’s efforts to address trade distortions and protect domestic producers. The acquisition of Stelco has been progressing smoothly, with expected synergies of $120 million to be achieved before the end of 2025, and the company is identifying additional ways to maximize value from the combination.
Cleveland-Cliffs Inc. (NYSE:CLF)’s cost structure is improving, with expectations of average costs declining by another $40 per net ton in 2025, supported by Stelco’s cost advantages and the weakening Canadian dollar. CLF maintains strong liquidity with $3 billion available and is focused on debt reduction, planning to use 100% of free cash flow toward debt reduction until it reaches its target leverage. The company expects significantly improved adjusted EBITDA and cash flow for 2025, particularly noting that for every $100 increase in HRC price, annual revenue would increase by roughly $1 billion, which would largely flow directly to EBITDA.
Overall, Cleveland-Cliffs Inc. (NYSE:CLF) ranks first on our list of the 12 stocks that are about to explode. While we acknowledge the potential of CLF as an investment, our conviction lies in the belief that 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 CLF but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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