We recently published a list of 10 Best Aluminum Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Steel Dynamics, Inc. (NASDAQ:STLD) stands against other best aluminum stocks to buy according to billionaires.
Aluminum is one of the most essential and versatile materials required by modern industries. It is known due to its unique qualities including its lightweight nature, corrosion resistance, and efficient recyclability. As industries move toward sustainability and efficiency, aluminum is seeing an increase in its demand. In 2023, its global market was valued at $229.83 billion, which is forecasted to grow to $403.29 billion by 2032, a compound annual growth rate (CAGR) of 6.2%, according to Fortune Business Insights. As demand rises for electric vehicles (EVs), green energy, and lightweight manufacturing, aluminum is becoming an attractive investment.
One of the big reasons why aluminum is seeing a rise in demand is its usage in electric vehicles. Heavier metals are being replaced with aluminum to increase fuel efficiency and driving range by automakers like BMW and Mercedes. The U.S. aluminum market is expected to reach $43.05 billion by 2032 as EV manufacturers ramp up the use of aluminum in order to make vehicles lighter and more energy-efficient. Furthermore, the aerospace industry also plays a key role in its demand. As global air travel recovers, Boeing and Airbus are ramping up production, relying heavily on aluminum alloys for fuselages and wings.
Additionally, the packaging industry is booming as companies make use of aluminum’s 100% recyclability. Aluminum-made beverage cans contain 3x to 12x more recycled material compared to other materials, resulting in less wastage and energy consumption, as per The Aluminum Association. The circular economy is gaining momentum as manufacturers rely on recycled aluminum in order to cut costs and emissions. Moreover, recycling aluminum saves energy that goes toward producing new metal, making it a leap forward in sustainability efforts.
While demand for aluminum increases, the trade war over metals is gaining traction. According to The New York Times, U.S. President Trump recently reintroduced 25% tariffs on imported aluminum to protect U.S. manufacturers. While this move will raise costs for automakers, beverage companies, and construction companies relying on imported aluminum, the domestic producers may benefit. On the other hand, Canada and European countries are retaliating with reprisal tariffs, increasing global supply chain uncertainty. Producing 45 million metric tons of aluminum annually, China has capped its output. This implies that the increasing demand will be fulfilled through recycling and secondary sources. Thus, the global supply chain can face uncertainties and lead to price rises as U.S. tariffs escalate trade tensions.
Furthermore, an important stride in the aluminum space is the increase of aluminum-ion batteries. These are considered potential alternatives for lithium-ion batteries, as they offer faster charging, longer lifespan, and decreased costs. According to Future Market Insights, the market for aluminum-ion batteries is forecasted to grow to $9.5 billion by 2035 due to demand for renewable energy and electric vehicles. Considering that aluminum is cheaper and more abundant than lithium, this transition could transform energy storage and transportation.
On the other hand, billionaire investors are increasing their investments in the aluminum industry, reflecting strong confidence in its growth potential. Blackstone CEO, who is supporting U.S. aluminum tariffs, expects domestic manufacturing to propel, as reported by Reuters. Concurrently, AI Circle reports that Malaysian tycoon Koon Poh Keong and Song Zuowen, a Chinese billionaire, are increasing their investments in aluminum ventures through strategic stake swap. Furthermore, aluminum stocks are giving a return of 4.32%, year-to-date, surpassing the broader market’s -4.13% performance. Thus, these billionaire-backed entries reflect the industry’s strength and future potential.
Our Methodology
To come up with the Best Aluminum Stocks to Invest in According to Billionaires, we looked into Insider Monkey’s database for billionaire stock holdings as of Q4 2024. We placed the stocks on the basis of the number of billionaires that have invested in them, as it reflects strong institutional confidence.
In the case where stocks had the same number of holders, we used the total value of billionaire investments to break the tie. Furthermore, this list includes stocks backed by some of the most accomplished hedge fund managers and business leaders, offering perspective into where billionaire investors are allocating their capital.
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).
A machinist inspecting a freshly-cut steel beam, ready to be shipped to its intended destination.
Steel Dynamics, Inc. (NASDAQ:STLD)
Number of Billionaires: 12
Number of Hedge Fund Holders: 45
Steel Dynamics, Inc. (NASDAQ:STLD), a prominent steel producer and metal recycler in the U.S., operates through Metals Recycling, Aluminum segments, Steel, and Steel fabrication. The company produces a range of steel and aluminum products for manufacturing, construction, and automotive industries.
Steel Dynamics reported robust financial performance for the fourth quarter and full year ended December 31, 2024. The company reported a fourth-quarter net income of $207 million, or $1.36 per diluted share, with an adjusted EBITDA of $372 million. Full-year 2024 net income came at $1.5 billion, or $9.84 per diluted share, while adjusted EBITDA amounted to $2.5 billion. Despite lower realized pricing in the quarter, the Steel Operations segment remained a significant driver, with near-record annual shipments of 12.7 million tons. Moreover, Steel Dynamics, Inc. (NASDAQ:STLD) garnered $1.8 billion in cash from operations and ended the year with $2.2 billion in liquidity, maintaining a robust balance sheet.
Furthermore, through its Aluminum Operations segments, which have been a key area of strategic growth, Steel Dynamics, Inc. (NASDAQ:STLD) continued to broaden its presence in the aluminum market. A significant milestone in its aluminum expansion was achieved as the company successfully cast its first aluminum ingot at the Columbus facility in 2025. The rolling mill and slab casting center in Sal Luis Potosí, Mexico, are advancing well, with commercial shipments anticipated to begin in mid-2025. The company aims to achieve an annual EBITDA of $650 million to $700 million as it expects the aluminum platform to reach a 50% run rate by the end of 2025 and 75% in 2026.
Along with strong financials, the company grew its quarterly dividend by 9% to $0.50 per share and authorized an additional $1.5 billion for share repurchases, reinforcing its commitment to shareholder value. Since 2017, the company has also repurchased $6.7 billion of its stock, dropping outstanding shares by 41% and returning $1.7 billion to shareholders in dividends.
Moreover, Steel Dynamics, Inc. (NASDAQ:STLD) was titled as one of the World’s Most Admired Companies for 2025 by Fortune, signifying the eighth consecutive year of this recognition. The company earned top scores for corporate reputation, international competitiveness, innovation, and financial soundness.
Consequently, Steel Dynamics has positioned itself as one of the best aluminum stocks to buy for long-term growth and shareholder return with ongoing investment in value-added products and prioritizing operational excellence.
Overall, STLD ranks 2nd on our list of best aluminum stocks to buy according to billionaires. While we acknowledge the potential of STLD, our conviction lies in the belief that certain 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 STLD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.