ArcelorMittal & Microsoft Deepen Partnership With Azure. How to Play MT Stock Here.

When they say the current wave of AI is a revolution, they are not far from the truth. AI's proliferation across industries is rising by the day and is now not just restricted to healthcare, automobiles, or content creation anymore. Companies from heavy industries such as steel are also rapidly incorporating the technology in their operations.

Notably, the world's second-largest steel producer, ArcelorMittal (MT), has extended its partnership with tech titan Microsoft (MSFT) to adopt Azure as its primary cloud computing platform. In a statement, the company said, "Together, these advances will empower ArcelorMittal to turn data into a strategic asset, enabling faster, smarter decisions and sustained competitive advantage as the company advances its long-term digital transformation."

Other than using Azure for upgrading the company's legacy IT systems and for advanced analytics, the steelmaker will use Microsoft Fabric, Purview, ⁠and Foundry to improve cybersecurity.

About ArcelorMittal

However, ArcelorMittal's AI initiatives with Microsoft are moves to improve its core operations: steel production.

Founded in 2006 through the merger of Mittal Steel and Arcelor, ArcelorMittal has built a diversified business spanning flat steel, long steel, mining, automotive steel, electrical steel, renewable energy infrastructure products, and value-added downstream solutions. Its products serve numerous industries, including automotive, construction, infrastructure, renewable energy, railways, and shipbuilding, among others.

And with its headquarters based in Europe (Luxembourg), ArcelorMittal also acts as an effective hedge for the Western world when it comes to steel procurement, where China is a dominant player.

Valued at a market cap of $54.4 billion, MT stock (or, to be precise, ADR) is up 62% on a year-to-date (YTD) basis. It also offers a dividend yield of 0.74%.

So, what brought ArcelorMittal here, and where can it go? Let's find out.

Global Presence With Vertical Integration

Founder Lakshmi Mittal, who, through his family, still controls the majority of the company's shares, adopted a risky playbook to build his steel empire. His expertise lies in acquiring sick, almost bankrupt steel companies, modernizing them, and turning them towards profitability. With this, Mittal built one of the foremost steel companies in the world by acquiring underperforming steel mills across North America, Europe, Latin America, Kazakhstan, and Africa.

All this has led to ArcelorMittal having steelmaking operations in 14 countries and commercial operations in 126 countries, with crude steel and iron ore production reaching 55.6 million tonnes and 48.8 million tonnes, respectively, in 2025. Thus, by spreading its production footprint across 60 countries and maintaining primary steelmaking facilities in 14 of them, the firm can pivot its supply chain to capture demand wherever infrastructure spending is highest.

A critical piece of its dominance, though, is its vertical integration. In an era where raw material price volatility can destroy margins overnight, owning a substantial portion of its iron ore and metallurgical coal supply provides a safety net that few others possess. In recent years, this self-sufficiency has allowed the company to maintain lower unit costs than its peers in Europe and Asia, who must rely on spot market purchases.

Finally, ArcelorMittal is also leveraging AI acutely to bolster its steelmaking processes. For instance, the company has deployed advanced neural networks that analyze thousands of data points every second to predict the internal temperature and chemical composition of molten metal. By using these deep learning models, engineers can now anticipate thermal fluctuations hours before they occur, which reduces the amount of coke and coal needed to maintain the reaction. Beyond the furnace, the company has implemented sophisticated algorithmic scheduling tools that optimize the flow of heavy machinery and logistics within the yards.

ArcelorMittal's Q2 Lacked Steel

ArcelorMittal's latest results for Q2 2026 were a miss on both revenue and earnings. In fact, the whole print was a mixed bag, with a slight negative tilt. 

Revenues were up by 5.2% from the previous year to $16.8 billion, missing the consensus estimate by more than $300 million. However, EBITDA/tonne, a crucial metric heavily scrutinized in the steel industry, moved to $155 from $135, highlighting the company's operational capabilities.

Yet, earnings fell to just $0.89 per share from $2.34 per share in the year-ago period. EPS also missed the Street estimates of $1.04 per share. Operating margins narrowed as well to 6.3% from 12.1% in the previous year.

Steel shipments and production were down in the quarter when compared to last year, coming in at 14.3 and 13.4 million tonnes, declining by about 1% and 2.9%, respectively.

Net cash from operations fell, but it was still positive at $961 million. In Q2 2025, it was $1.4 billion. Overall, ArcelorMittal ended the June '26 quarter with a cash balance of $4.9 billion, higher than its short-term debt levels of $2.7 billion.

Meanwhile, MT continues to trade at reasonable levels. While its forward P/E of 15.65 is just above the sector median of 14.59, forward EV/EBITDA at 7.79 almost matches the sector median. Forward P/CF is at 9.26 when the sector median is at 8.95.

Analyst Opinion of MT Stock

Overall, analysts have earmarked a consensus rating of “Moderate Buy” for MT stock. The mean target price has already been surpassed, while the high target price of $80 implies limited potential upside from current levels. Out of 13 analysts covering the stock, five have a “Strong Buy,” one has a “Moderate Buy” rating, and seven have a “Hold” rating.