TLDR
- FRMI stock closed at $32.53 on Wednesday, up 54% from $21 IPO price
- Fermi raised $682.5 million selling 32.5 million shares on Nasdaq
- Company achieved $12.5 billion valuation just nine months after January 2025 founding
- Shares rose another 11% to $36.14 in Thursday premarket trading
- Texas-based REIT plans world’s largest data center powered by nuclear, gas and solar
Fermi stock delivered a strong first day on Nasdaq Wednesday. FRMI shares opened at $25 and closed at $32.53, well above the $21 IPO price.
The Amarillo, Texas-based energy REIT raised $682.5 million in its public debut. The company priced shares within its marketed range of $18 to $22.
Co-founded by former Texas Governor and U.S. Energy Secretary Rick Perry, Fermi launched in January 2025. The pre-revenue company now carries a $12.5 billion valuation, up from $3 billion during its convertible bond issuance earlier this year.
Thursday premarket trading showed continued investor interest. FRMI stock climbed 11% to $36.14, putting shares on track for a 76% gain from the offering price.
AI Infrastructure Drives Demand
Fermi sold 32.5 million shares in an upsized offering. The company plans to use proceeds to build power plants for AI data centers.
“It speaks to the gold rush happening in AI infrastructure right now. It’s a cash geyser,” said Matt Kennedy, senior strategist at Renaissance Capital. The quick path from founding to IPO reflects strong market appetite for AI-related investments.
Project Matador, Fermi’s flagship development, targets 1.1 gigawatts of power by late 2026. At full capacity, the project could deliver 11 gigawatts.
One gigawatt equals roughly half the Hoover Dam’s generating capacity. By 2038, Fermi’s Texas site could produce double the electricity serving New York City.
Revenue Timeline and Risks
Fermi secured a non-binding letter of intent with its first tenant last month. The 20-year agreement shows early customer interest, but revenue won’t start until 2027.
“Any investor buying Fermi will need to have a mindset of ‘if you build it, they will come,'” Kennedy said. The company’s political connections through Perry add another layer of investor confidence.
Troy Hooper, co-head of equity capital markets at Mergermarket, highlighted the opportunity. “Demand for AI-driven infrastructure and Fermi’s plan to pair it with its own modern power sources has investors intrigued,” he said.
The dual listing begins trading on the London Stock Exchange Thursday. This expands access for international investors seeking AI infrastructure exposure.
Analysts warn execution will determine long-term success. Investors will scrutinize signed contracts and construction milestones closely.
“History offers a cautionary note: many pre-revenue IPOs during the Dot-com era and the recent SPAC boom failed to live up to the hype and ended poorly,” Hooper said.
A successful FRMI performance could encourage other capital-intensive AI infrastructure companies to go public. The Nasdaq debut shows investors remain hungry for AI exposure despite the risks of pre-revenue businesses.
Fermi plans to power its data center complex using nuclear energy, natural gas and solar. The combination aims to provide reliable energy for power-hungry AI operations.
