Cleveland-Cliffs (CLF) Climbs 16% on Strong Earnings, Highly Upbeat Outlook

Cleveland-Cliffs Inc. (NYSE:CLF) saw its share prices increase by 15.98 percent on Thursday to finish at $10.96 apiece, after reporting a strong earnings performance in the second quarter of the year. During the period, the company narrowed its net loss attributable to shareholders by 70 percent to $145 million from $486 million in the same period last year, as revenues increased by 6 percent to $5.2 billion from $4.9 billion year-on-year. A Cleveland-Cliffs facility in the Industrial Valley. Photo from Cleveland-Cliffs Strong Domestic Market Cleveland-Cliffs Inc. (NYSE:CLF) Chairman and CEO Lourenco Goncalves pointed to the ongoing global tensions as benefitting the domestic steel market. “The domestic market remains strong as ongoing global tensions continue to underscore the importance of having a thriving domestic steel industry. Demand continues to improve, imports remain subdued, and lead times are extending further,” he said. “Our automotive volumes remained strong during the quarter and will increase further in Q3, helping to further absorb fixed costs as our finishing lines operate at higher utilization rates. In addition, we are beginning to see meaningful improvement in the Canadian market, positioning Stelco to return to generating significant earnings,” he added. Continued Earnings Improvement Looking ahead, Cleveland-Cliffs Inc. (NYSE:CLF) is confident about further improving its earnings performance in the second half of the year, “with average selling prices, volumes, and costs all moving in the right direction.” “Our second-half earnings performance should be our strongest since 2021 as Q4 EBITDA is currently expected to even further exceed our Q3 guidance. We expect to finish the year on a positive note and enter 2027 with significant momentum and additional opportunities for upside, including the higher reset of fixed price contracts and much improved profits in Canada,” Goncalves said. Hands Over Reins to Son In line with the results, Cleveland-Cliffs Inc. (NYSE:CLF) announced that its chief financial officer Celso Goncalves has been promoted to president and is now an official member of the board of directors. He replaced his father, Lourenco, who will remain as chairman and CEO of the company. Celso has served as executive vice president and CFO since 2021 and has been with the firm since 2016. Hedge Fund Participation Slides Institutional participation in the company notably weakened in the first quarter of the year, despite improving prospects for the domestic steel market. Based on data by Insider Monkey, 53 hedge funds held positions in the firm during the period, down from 56 in the previous quarter. Their combined holdings also significantly dropped by 34 percent to $1.19 billion from $1.8 billion quarter-on-quarter, even as expectations for stronger domestic steel demand and supportive trade policies improved. [im-yf-promo] While we acknowledge the potential of CLF as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. [/im-yf-promo] While we acknowledge the risk and potential of CLF as an investment, our conviction lies in the belief that some 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 and that has 10,000% upside potential, check out our report about the cheapest AI stock. READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy. Disclosure: None. Follow Insider Monkey on Google News. Subscribe to Insider Monkey's Free Daily Newsletter and Join 100K+ Readers or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy.