Few of us will ever take a tour of Meta Platforms' (META) Mesa Data Center in Arizona... Meta has invested more than $1 billion to build this 2.5-million-square-foot campus. And it will run Meta's AI infrastructure – including Facebook, Instagram, and WhatsApp.
An 'Under the Radar' Opportunity in the Metals Space
By Joe Austin, senior analyst, Chaikin Analytics
Few of us will ever take a tour of Meta Platforms' (META) Mesa Data Center in Arizona...
Meta has invested more than $1 billion to build this 2.5-million-square-foot campus. And it will run Meta's AI infrastructure – including Facebook, Instagram, and WhatsApp.
And few of us will ever see the Calcasieu Pass 2 ("CP2") liquefied natural gas terminal and pipeline complex...
It's located outside of Lake Charles, Louisiana. At an estimated cost of more than $15 billion, the facility will be able to process and export at least 20 million metric tons of gas per year. It's also an important part of the U.S. trying to double its gas exports by 2029.
However, we'll all be able to ride on the Brightline West high-speed train...
This is a more than $20 billion project that will take passengers from Southern California to Las Vegas in about two hours. When completed, the route cuts the driving time in half.
These big projects all have something important in common – steel.
Meta's data center alone requires around 20,000 tons of structural steel and joists.
And steel typically accounts for 15% to 30% of an LNG facility's costs. That means billions of dollars' worth of steel in CP2.
Meanwhile, Brightline West will use more than 110,000 tons of steel just for its tracks and bridges.
These are just three of the massive infrastructure projects under construction across the country right now. Data centers, energy terminals, bridges, tunnels, rail lines – they all use lots of steel.
Gold and silver have been grabbing investor attention lately. But there's plenty of action in steel, too...
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A Promising Picture for Steel
Keep in mind that 2025 was a pivotal year for domestic steelmakers...
Three things came together to create a near-perfect setup for the industry.
Tariff protection hit levels that we haven't seen in decades. Demand ticked up because of massive infrastructure projects. And new production technologies are adding to the industry's overall efficiency.
In June, President Donald Trump imposed a 50% tariff on steel and aluminum imports. That's up from the 25% tariff previously in place since 2018.
U.S. steel giant Nucor (NUE) says foreign imports' share of U.S. steel consumption fell from 25% early in the year to 16% in October and 14% in November.
That's an 11-point drop in less than a year. And domestic mills stepped up to fill the gap.
Meanwhile, at least 10 "megaprojects" worth more than $1 billion each are breaking ground in 2026 – in manufacturing, energy, transportation, and tech.
Data-center construction exploded in 2025 to $77.7 billion. That's nearly triple the level in 2024. The average project now costs $633 million.
And 2026 is poised to be even bigger. More than $88 billion in projects are already in the pipeline.
Meanwhile, the Trump administration has committed $200 billion in federal money for infrastructure. The government is also pushing states, cities, and private companies to add $1.5 trillion more.
That includes projects like the Interstate 5 bridge linking Portland and Vancouver... the Brent Spence Bridge between Cincinnati and Covington... and the I-10 Calcasieu River Bridge in Louisiana – right next to that new CP2 gas terminal.
And the industry isn't just riding a demand wave. It's getting leaner and more profitable at the same time.
U.S. Steel and its new parent Nippon Steel are putting $14 billion into U.S. facilities through 2028. The goal is to unlock $2.5 billion per year in earnings and cost savings by 2030.
Later this year, Nucor will finish building its largest steel mill ever in West Virginia. The plant will produce 3 million tons of sheet steel per year. And it's designed to be one of the most advanced, lowest-emission steel facilities in the world.
Again, we've seen a near-perfect setup for the steel industry. And to take it a step further from the investing standpoint, let's turn to the Power Gauge...
Our System Sees Upside for Steel Stocks
In the Power Gauge, we track the metals and mining space more broadly with the State Street SPDR S&P Metals & Mining Fund (XME)...
The Power Gauge turned "bullish" on XME in mid-2025. And the fund has been in a steady uptrend ever since. Take a look...
Digging deeper into XME's individual holdings, 17 stocks currently earn a "bullish" or better rating. That compares with 15 in neutral territory... and only three that are "bearish" or worse.
And within the 17 "bullish" or better holdings, seven are either steel producers or companies in the steel supply chain. That represents more than one-third of those "bullish" or better stocks.
Again, the steel industry has a setup that's hard to ignore...
Tariffs blocked foreign competition. Infrastructure projects are driving demand. And steel companies are pouring billions of dollars into new mills and technology to stay ahead.
Few of us will ever directly see where all that steel goes. But we can invest in an American industry that's coming back strong.
Good investing,
Joe Austin Editor's note: Joe recently joined our founder Marc Chaikin for a big reveal...
In short, it's a way to spot the biggest potential earnings beats – before they occur. And as Marc and Joe explain, it can help identify which stocks still have real potential to double or triple from here... and which ones are due for a sell-off that could wipe out years' worth of gains.
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are Bullish. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Communication
+1.94%
Industrials
+1.76%
Financial
+1.63%
Consumer Discretionary
+1.09%
Energy
+0.98%
Information Technology
+0.95%
Real Estate
+0.14%
Utilities
-0.37%
Health Care
-0.54%
Materials
-0.66%
Consumer Staples
-1.81%
* * * *
Industry Focus
Innovative Technology Services
8
65
26
Over the past 6 months, the Innovative Technology subsector (XITK) has underperformed the S&P 500 by -25.04%. Its Power Bar ratio, which measures future potential, is Very Weak, with more Bearish than Bullish stocks. It is currently ranked #20 of 21 subsectors and has moved down 1 slot over the past week.
Indicative Stocks
CSGP
CoStar Group, Inc.
ALKT
Alkami Technology, I
BL
BlackLine, Inc.
* * * *
Top Movers
Gainers
GLW
+7.32%
FIX
+6.46%
SNDK
+4.65%
EXR
+4.56%
EXE
+4.05%
Losers
AKAM
-14.07%
CRWD
-7.95%
ORCL
-5.4%
ARES
-5.15%
PAYC
-4.98%
* * * *
Earnings Report
Earnings Surprises
PPL PPL Corporation
Q4
$0.41
Missed by $-0.01
LAMR Lamar Advertising Company
Q4
$1.50
Missed by $-0.07
BCPC Balchem Corporation
Q4
$1.31
Beat by $0.02
* * * *
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