In this article, we will take a detailed look at 12 Stocks That Are About to Explode.
Despite the current headwinds and uncertainty (which also caused heightened volatility in the last 2 weeks), there are indications that the recent US stock market correction was short-lived, and the market could return to growth. Helping the stock market move higher was a rebound in February’s retail sales, following a downward revision in January. The pattern of evolution hints that January’s sluggishness was more weather-driven and had little to do with the general strength of the consumer. Yardeni Research recently expressed a strong belief that retail sales will move higher in March and April, supporting the economy. Also, the recent cuts in real GDP growth projections for the first quarter of 2025 by the Atlanta Fed are primarily driven by a minority of economic niches dependent on public spending, while the core economic sectors remain strong. With that being said, we are currently at a potential bottom of the market correction, which could represent a favorable moment to pick stocks that are about to explode.
Insider trading, specifically purchases made by key executive officers and directors, can often signal future stock price appreciation. When insiders buy shares of their own company, it suggests that those with the most intimate knowledge of the firm’s prospects view the stock as undervalued. Economic research supports this idea; for instance, Lakonishok and Lee (2001) found that insider buying tends to precede periods of higher-than-average returns, indicating that insider purchases provide meaningful predictive power regarding stock performance. Therefore, tracking insider transactions, particularly when top management is actively buying shares in companies that are at or near 52-week lows, may help investors anticipate stocks that are about to explode.
READ ALSO: 10 Stocks Set to Explode in 2025
Insider trading signals become particularly relevant as the new Trump 2.0 regime has caused a plethora of industries to crash and trade near their lows – the tariff news cycle has become exhausting, causing uncertain capital spending plans on top of direct cuts to many government programs and spending. The policies of the new US administration could indeed have long-lasting effects on many industries, such as government contracting (the closure of USAID represents a giant erosion of the total addressable market). Here’s what Treasury Secretary Scott Bessent recently said:
“The market and the economy have become hooked, become addicted, to excessive government spending, and there’s going to be a detox period… Could we be seeing this economy that we inherited starting to roll a bit? Sure. Look, there’s going to be a natural adjustment as we move away from public spending.”
Despite major changes being made in some directions, we do not exclude the possibility that many companies, that reached new lows since the election day of November 2024, are mainly driven by investors’ fears and uncertainty, which may or may not materialize. For instance, many healthcare stocks have been trading lower on fears that Republicans will start digging into Medicare/Medicaid reimbursement policies and potentially interfere with the revenue base of companies relying on those programs. In this context, watching for potential hidden signals from insiders (such as significant insider buying) may help clear out any uncertainty, fear, and doubts by providing a tangible indication of management’s confidence in the company’s future prospects. Given this, we will take a look at stocks that are about to explode.
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Our Methodology
For this article, we used Insider Monkey’s insider trading screener to find stocks with at least two insiders buying shares worth at least $100,000 in 2025. Then, we considered only the stocks that are at or near their 52-week low. Our belief is that at least two insiders buying a significant amount of stock while the share price is at or near the lows represents an increased probability that the bottom is in rear-view mirror. Finally, we compare the list with our proprietary Q4 2024 database of hedge funds’ ownership and include in the article the top 12 stocks with the largest number of hedge funds that own the stock. Analysts’ projections for each stock’s upside potential were also included to assess their likelihood of significant growth.
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).
12. Arcosa, Inc. (NYSE:ACA)
Number of Hedge Fund Holders: 23
Analysts’ Upside Potential as of March 27: 34.33%
Arcosa, Inc. (NYSE:ACA) provides infrastructure-related products and solutions across construction, engineered structures, and transportation markets primarily in North America. The company’s operations include the manufacturing of construction aggregates, specialty materials, steel structures such as transmission towers and wind towers, storage tanks, and barge and rail transportation equipment. ACA serves diverse sectors, including energy, transportation, industrial, and construction, supplying materials and engineered products essential for infrastructure development and improvement.
2024 was a transformative year for Arcosa, Inc. (NYSE:ACA), marked by successful portfolio optimization through expanding growth businesses while reducing complexity and cyclicality. The company delivered double-digit organic growth, demonstrating the strength of its infrastructure-led portfolio. Significant margin expansion was achieved through higher-margin acquisitions and organic improvements, supported by noncore asset divestitures. The company generated robust free cash flow, positioning itself for debt reduction in 2025 and continued growth beyond. Strategic acquisitions, including Stavola and Ameron, contributed positively to margin expansion.
Arcosa, Inc. (NYSE:ACA) successfully completed several organic initiatives, including a new concrete pole plant in Florida and a wind tower facility in New Mexico. Construction Products now accounts for approximately 62% of adjusted EBITDA, nearly double its contribution from 2018. For 2025, management anticipates revenues between $2.8 billion to $3 billion and adjusted EBITDA ranging from $545 million to $595 million, implying 30% growth at the midpoint. The guidance incorporates double-digit organic and inorganic growth, with a slightly higher weight toward inorganic growth due to nine additional months of Stavola in 2025. With at least 2 insiders buying more than $100,000 worth of stock in 2025, ACA is one of the stocks that are about to explode.
11. Ashland Inc. (NYSE:ASH)
Number of Hedge Fund Holders: 24
Analysts’ Upside Potential as of March 27: 3.7%
Ashland Inc. (NYSE:ASH) is a global specialty chemicals company providing ingredients and performance-enhancing solutions primarily for consumer and industrial markets. The company operates through segments such as personal care, pharmaceuticals, coatings, adhesives, nutraceuticals, and specialty additives, producing cellulose ethers, biofunctional ingredients, rheology modifiers, and other specialized formulations. ASH serves diverse end-markets, including personal care products, pharmaceuticals, food and beverages, paints and coatings, construction materials, and industrial manufacturing.
Ashland Inc. (NYSE:ASH)’s Q1 2025 sales were $405 million, down 14% YoY, with the decline primarily driven by portfolio optimization actions, including the nutraceutical divestiture. The company proactively moved several plant maintenance turnarounds into the first quarter to enable greater operational flexibility, which impacted Q1 absorption and resulted in approximately $5 million in unanticipated EBITDA costs. Despite these challenges, adjusted EBITDA margins remained consistent YoY, with margins expected to improve significantly throughout the year as plans are well positioned and cost savings are being realized. The company is making progress on its $90 million cost-saving target, with $21 million of opportunities identified and a $12 million annual run rate already achieved from the $30 million restructuring program.
Ashland Inc. (NYSE:ASH) recently announced an agreement to sell its Avoca business, marking a significant step in finalizing its strategic transformation. While facing some softness in European demand and inventory control actions from pharma customers, the company maintained its full-year fiscal 2025 outlook, expecting sales in the range of $1.9 billion to $2.05 billion and adjusted EBITDA in the range of $430 million to $470 million. The company’s strategy focuses on executing in a difficult, uncertain market while positioning for future growth through globalization and innovation initiatives, each aiming to generate $100 million in additional revenue by fiscal year 2027.
10. Beazer Homes USA, Inc. (NYSE:BZH)
Number of Hedge Fund Holders: 25
Analysts’ Upside Potential as of March 27: 111.07%
Beazer Homes USA, Inc. (NYSE:BZH) is a residential homebuilder operating primarily in the United States. The company specializes in designing and constructing single-family homes and townhomes across various price segments, from entry-level to move-up buyers. The company offers customized floor plans and flexible home designs, emphasizing energy efficiency, quality construction, and affordability. BZH focuses its operations in select markets across the Southeast, Southwest, and Mid-Atlantic regions, strategically targeting areas with strong demographic growth and housing demand. With an analyst upside potential of over 111%, BZH is one of the stocks that are about to explode.
Beazer Homes USA, Inc. (NYSE:BZH) had a profitable and productive Q1 2025 that positions it to achieve both its full-year outlook and multiyear goals. The company experienced notable growth with community count up nearly 20% versus the prior year, enabling increased sales and closings compared to last year. Their active lot position grew by about 10%, providing visibility into further community count growth for both current and next year. The company’s balance sheet efficiency improved with 59% of lot position now controlled through options, up from 53% last year, which helps improve returns and mitigate risk. Zero Energy Ready homes gained significant momentum, representing more than 85% of sales during the quarter, up from 43% in the previous year’s first quarter, with reduced costs to achieve the DOE standard by several thousand dollars per home.
Despite these positives, Beazer Homes USA, Inc. (NYSE:BZH) missed both sales and closings guidance for the quarter, particularly experiencing challenges in the Texas and Florida markets, where higher inventory levels led to sluggish sales and more aggressive incentives. Looking forward, the company remains committed to achieving its three multiyear goals: expanding community count, deleveraging the balance sheet, and delivering superior homes. They expect to end the year with around 180 communities and are on track to have more than 200 communities by the end of FY2026. The company also aims to reduce its net debt-to-net capitalization ratio below 30% by the end of the fiscal year 2026.
9. Amkor Technology, Inc. (NASDAQ:AMKR)
Number of Hedge Fund Holders: 29
Analysts’ Upside Potential as of March 27: 61.4%
Amkor Technology, Inc. (NASDAQ:AMKR) provides outsourced semiconductor packaging and test services, offering comprehensive solutions to semiconductor manufacturers globally. The company specializes in advanced packaging technologies, including flip-chip, wafer-level packaging, system-in-package (SiP), and wire-bond packages, alongside comprehensive testing services. AMKR’s services are critical in applications spanning consumer electronics, automotive systems, communications, industrial equipment, and computing sectors. The Arizona-based company ranked eighth on our recent list of 12 Stocks with Heavy Insider Buying in 2025.
Amkor Technology, Inc. (NASDAQ:AMKR) expects a stronger second half in 2024, with revenue seasonality more skewed than their historical 45%-55% first-half/second-half split, partly due to a socket loss in the iOS ecosystem that affected first-half performance. The company’s market outlook varies across segments, with communications feeling normal, compute showing bullishness driven by AI, and automotive displaying mixed trends with stronger advanced applications but ongoing inventory corrections in mainstream products. AMKR is making significant strategic investments, including a new facility in Arizona and an operational facility in Vietnam, which has completed one module out of four and is performing well, with yields reaching or exceeding their Korea facility levels.
In terms of advanced packaging, Amkor Technology, Inc. (NASDAQ:AMKR) positions itself as a fast follower to TSMC, developing similar technologies like CoWoS-S and SWIFT while maintaining strategic partnerships for US manufacturing. The company’s financial outlook shows margins slightly better than 2023, with expectations for stronger performance in the second half of 2024, potentially reaching high-teens margin levels similar to Q3-Q4 2022. Capital expenditure is guided at $850 million for 2024, with 5% to 10% allocated to the US facility, and the company maintains a focus on advanced packaging, SiP for specific devices, and test capabilities as primary investment areas. With at least 2 insiders buying more than $100,000 worth of stock in 2025, AMKR is one of the stocks that are about to explode.
8. Helmerich & Payne, Inc. (NYSE:HP)
Number of Hedge Fund Holders: 30
Analysts’ Upside Potential as of March 27: 29.2%
Helmerich & Payne, Inc. (NYSE:HP) is a provider of drilling solutions and rig services primarily to the oil and gas industry, specializing in contract drilling of wells for exploration and production companies. The company operates through multiple segments, notably US Land Operations, Offshore Operations, and International Land Operations, with its core business centered around advanced drilling rigs known as FlexRigs. These technologically sophisticated rigs are designed for efficiency, safety, and precision in unconventional and conventional drilling environments. HP is one of the stocks on our list that are about to explode.
Helmerich & Payne, Inc. (NYSE:HP) continued to execute at a high level during Q1 2025, with their North America Solutions segment maintaining industry-leading operational and financial results. The company made significant progress on its international growth strategy through two key initiatives: completing the exportation of 8 FlexRigs into Saudi Arabia for unconventional natural gas drilling and closing the KCA Deutag acquisition, which positions H&P as a global leader in providing onshore drilling solutions.
In North America, HP maintains a dominant market position with over 35% market share in the super-spec FlexRig fleet and a particularly strong presence in the Permian Basin with around 100 rigs operating. The company’s customer-centric approach and performance contracts have enabled it to maintain healthy margins and increase market share despite industry rig count declines in 2024. The KCA Deutag acquisition brings a solid backlog of approximately $5.5 billion supported by blue-chip customers, though there are some near-term headwinds, including rig suspensions in Saudi Arabia.
Looking ahead to 2025, while North America Solutions’ margins are expected to remain healthy with some modest decline, Helmerich & Payne, Inc. (NYSE:HP) anticipates growth opportunities in multiple markets globally and maintains a strong focus on debt reduction while preserving their investment-grade credit rating. The company remains committed to prudent capital allocation, maintaining a strong financial position, and balancing significant free cash flow between growth CapEx opportunities and shareholder returns.
7. Frontdoor, Inc. (NASDAQ:FTDR)
Number of Hedge Fund Holders: 33
Analysts’ Upside Potential as of March 27: 65.3%
Frontdoor, Inc. (NASDAQ:FTDR) provides home service plans and related solutions designed to manage household repairs and maintenance for homeowners across the United States. The company operates primarily through its flagship brand, American Home Shield, offering subscription-based home warranty services that cover appliances, HVAC systems, plumbing, electrical systems, and other essential home components. FTDR connects customers with a nationwide network of contractors and technicians, facilitating repair services and preventative maintenance.
Frontdoor, Inc. (NASDAQ:FTDR) delivered exceptional financial performance in 2024, with revenue increasing 4% to $1.84 billion and adjusted EBITDA reaching an all-time high of $443 million, representing a 28% increase. The company achieved record gross margins of 54% and maintained the highest ever retention rate of 78.5%. The acquisition of 2-10 Home Buyers Warranty in December has strengthened FTDR’s market position by adding more members, revenue, and EBITDA. The company’s non-warranty services generated $107 million in revenue in 2024, demonstrating successful diversification beyond the core warranty business.
Frontdoor, Inc. (NASDAQ:FTDR) maintains a strong financial position with $474 million in cash and marketable securities at year-end. Looking forward, the company expects revenue growth of approximately 10% in 2025, targeting a range of $2 billion to $2.04 billion. The long-term outlook is positive, with revenue expected to grow to at least $2.5 billion in the period from 2026 through 2028, representing nearly a 25% increase. The company’s strategic focus includes growing warranty member count, maximizing 2-10 integration value, and expanding non-warranty services. With at least 2 insiders buying more than $100,000 worth of stock in 2025, FTDR is one of the stocks that are about to explode.
6. Grocery Outlet Holding Corp. (NASDAQ:GO)
Number of Hedge Fund Holders: 33
Analysts’ Upside Potential as of March 27: 10.16%
Grocery Outlet Holding Corp. (NASDAQ:GO) operates a network of discount grocery stores specializing in opportunistic purchasing and value-focused retailing. The company offers branded groceries, fresh produce, refrigerated and frozen foods, deli, dairy, general merchandise, and health and beauty care products at discounted prices, typically through sourcing surplus inventory, closeouts, and manufacturer overruns. GO operates primarily through independently owned and operated stores under a flexible franchise model, targeting value-oriented customers seeking savings on quality goods. It is among the stocks that are about to explode.
Grocery Outlet Holding Corp. (NASDAQ:GO) delivered solid Q4 results with comparable store sales increasing 2.9%, driven by 3% growth in comp count as customers responded to their assortment of “WOW!” items featuring deepest discounts. The company is implementing significant strategic changes, including appointing new leadership with Jason Potter as CEO and Chris Miller as CFO, while also reassessing their new store opening strategy. The company is tempering near-term unit growth expectations, planning to open 33-35 net new stores in 2025 instead of the previously planned 50+ stores, focusing on existing markets and high-priority adjacent markets to improve store performance and return on invested capital.
Grocery Outlet Holding Corp. (NASDAQ:GO) has made progress on systems transition work but still faces some challenges, particularly around inventory management tools for operators. On the supply chain front, the company has decided not to pursue multi-temperature distribution expansion and instead is simplifying its regional supply chain strategy, including opening a new 680,000-square-foot ambient distribution center in Vancouver. The company has implemented a workforce reduction as an initial step to reassessing its G&A cost structure and is exploring additional opportunities to scale G&A through automation and process improvements. While facing near-term challenges, management remains confident in the long-term potential of the business, citing vast white space with the potential to open over 4,000 stores across the United States.
5. Celanese Corporation (NYSE:CE)
Number of Hedge Fund Holders: 35
Analysts’ Upside Potential as of March 27: 12.01%
Celanese Corporation (NYSE:CE) is a global chemical and specialty materials company engaged primarily in the manufacture and marketing of high-performance engineered polymers, acetyl products, and chemical intermediates. The company operates through segments including Engineered Materials, Acetyl Chain, and Acetate Tow, providing products such as engineered thermoplastics, acetyl chemicals (acetic acid, vinyl acetate monomer), adhesives, and cellulose derivatives. CE serves diverse end markets, including automotive, consumer goods, electronics, construction, medical, and industrial applications.
Celanese Corporation (NYSE:CE) is focusing intensely on cash generation, productivity, and cost reduction as core competencies to drive shareholder value. The company has executed several decisive actions, including implementing over $75 million in cost actions, reducing the 2025 capital plan by $100 million to $300-350 million, and adding new leadership to the Engineered Materials business. The company has strengthened its board by adding Chris Kuehn and Scott Sutton to bring additional finance and operational expertise, with a particular focus on cash generation, margin expansion, productivity, and deleveraging. A new finance and business review committee has been established to evaluate options for improving the company’s operating model performance, driving cash generation, and reviewing the portfolio.
Celanese Corporation (NYSE:CE) is actively working on divestitures to facilitate deleveraging, though maintaining a principle-based approach to avoid fire-selling assets. In terms of operational performance, CE has achieved $250 million in synergies as of year-end and is focusing on reversing margin compression trends. The company is particularly emphasizing growth opportunities in China, especially in the electric vehicle sector, where commercialization times are shorter (6-12 months) compared to the Western Hemisphere (24 months). With at least 2 insiders buying more than $100,000 worth of stock in 2025, CE is one of the stocks that are about to explode.
4. Elanco Animal Health Incorporated (NYSE:ELAN)
Number of Hedge Fund Holders: 37
Analysts’ Upside Potential as of March 27: 43.6%
Elanco Animal Health Incorporated (NYSE:ELAN) is a global animal health company engaged in developing, manufacturing, and marketing pharmaceutical products and vaccines for companion animals (dogs and cats) and farm animals (cattle, poultry, swine, and fish). The company’s portfolio includes products focused on disease prevention, therapeutic treatments, parasite control, nutritional health, and animal productivity enhancement. ELAN serves veterinarians, farmers, livestock producers, and pet owners worldwide, operating across key geographic markets, including North America, Europe, Asia-Pacific, and Latin America. With an upside potential of over 43%, ELAN is one of the stocks that are about to explode.
Elanco Animal Health Incorporated (NYSE:ELAN) has delivered impressive results, marking six quarters of consecutive growth and achieving a notable 3% increase in constant currency sales for 2024. Looking ahead, the company anticipates an even stronger performance, forecasting organic growth of 4-6% in constant currency sales for 2025. Central to this optimistic outlook is ELAN’s robust innovation portfolio, featuring six promising blockbuster products that are now projected to generate between $640 million and $720 million in revenue during 2025. Particularly notable is Experior, a standout in the farm animal segment, which has reached blockbuster status in the US. This accomplishment reinforces the company’s dominant market position, where it currently holds leading rankings in the US across beef, poultry, and swine segments.
In the pet health division, Elanco Animal Health Incorporated (NYSE:ELAN) is also accelerating growth with the launch of two significant new products. Credelio Quattro, introduced in January 2025, distinguishes itself by offering more comprehensive protection and faster tick elimination compared to its competitors. Concurrently, Zenrelia, the company’s JAK inhibitor designed to treat atopic dermatitis, has demonstrated strong efficacy and already achieved approximately 30% penetration across roughly 8,000 veterinary clinics in the US.
Despite these positive developments, Elanco Animal Health Incorporated (NYSE:ELAN) faces challenges such as considerable foreign exchange headwinds, which negatively affected both revenue and EBITDA during the fourth quarter of 2024. Furthermore, strategic decisions like the sale of the Aqua business to Merck and significant investments supporting new product launches have created uneven EBITDA distribution, shifting profitability toward the latter half of 2025. However, at least 2 insiders bought more than $100,000 worth of shares in 2025, which potentially suggests that the peak headwinds are in the rear-view mirror.
3. Evolent Health, Inc. (NYSE:EVH)
Number of Hedge Fund Holders: 38
Analysts’ Upside Potential as of March 27: 64.6%
Evolent Health, Inc. (NYSE:EVH) provides technology-enabled clinical and administrative solutions designed to support value-based healthcare delivery and improve patient outcomes. The company offers a suite of integrated services, including population health management, care management, analytics, specialty care management, and administrative solutions to healthcare providers, payers, accountable care organizations, and government-sponsored health plans. Primarily operating in the US healthcare market, EVH focuses on enhancing clinical efficiency, reducing costs, and promoting quality care through data-driven insights, predictive modeling, and coordinated care strategies. The company ranked sixth on our recent list of 10 Stocks That Will Bounce Back According To Hedge Funds.
Evolent Health, Inc. (NYSE:EVH) reported revenue of $2.55 billion for 2024, representing a 30% growth versus 2023, with an adjusted EBITDA of $160.5 million landing at the low end of guidance due to elevated oncology expenses. For 2025, the company projects an organic growth of 15% to 18% after adjusting for one-time contract conversions and revenue recognition impacts. EVH has successfully renegotiated three Performance Suite contracts, securing $115 million in projected adjusted EBITDA improvement compared to the Q4 exit run rate. The company has implemented enhanced contractual protections and expects the oncology Performance Suite portfolio to return to profitability in 2025, with approximately 300 basis points of additional margin maturation available on the current book of business.
Evolent Health, Inc. (NYSE:EVH) is investing in automation and efficiency initiatives, expecting to achieve over $20 million in annualized direct cost improvements by the end of 2025, with a longer-term expectation of over $50 million annually once fully ramped up. Notably, EVH maintained a 100% logo renewal rate for top customers, representing more than 90% of revenue in 2024, including an important contract extension with Centene. The company’s 2025 guidance projects revenue of $2.06 billion to $2.11 billion and adjusted EBITDA between $135 million and $165 million, reflecting both growth opportunities and anticipated headwinds in the healthcare market. With at least 2 insiders buying more than $100,000 worth of stock in 2025, EVH is one of the stocks that are about to explode.
2. Alight, Inc. (NYSE:ALIT)
Number of Hedge Fund Holders: 42
Analysts’ Upside Potential as of March 27: 66.9%
Alight, Inc. (NYSE:ALIT) is a global provider of cloud-based human capital and business solutions, specializing in employee benefits, payroll administration, human resources outsourcing, and wealth management services. The company operates primarily through its proprietary Alight Worklife platform, delivering technology-driven solutions to simplify HR processes, enhance employee engagement, and optimize organizational efficiency. ALIT serves diverse markets across North America, Europe, and Asia-Pacific, supporting a wide range of industries, including healthcare, retail, financial services, manufacturing, and technology.
The year 2024 was transformative for Alight, Inc. (NYSE:ALIT) as the company completed its cloud migration, divested Payroll & Professional Services to simplify its business model, and evolved its leadership structure. The company’s Q4 performance was in line with expectations, featuring growth in recurring revenue, strong ARR bookings, and robust cash flow. For 2025, ALIT expects recurring revenue to be on stronger footing, profit margin to expand independent of top-line performance, and free cash flow to accelerate.
Alight, Inc. (NYSE:ALIT) demonstrated improved retention rates, up 8 points from the prior year, returning to near-historical levels. The sales pipeline shows strong momentum, being up 54% from the prior year, with ARR bookings growing 18% in 2024. Looking ahead to 2025, management projects revenue of $2.32 billion to $2.39 billion, representing negative 1.5% to positive 1.5% growth, with revenue growth rates expected to ramp through the year. The company expects an adjusted EBITDA of $620 million to $645 million with margin expansion between 150 and 180 basis points, driven by $55 million in cloud migration savings and productivity initiatives.
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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