NEW YORK, August 11, 2026, 10:14 EDT — Fermi stock surged 16% after the chipmaker announced a $6.5 billion lease agreement with cloud provider TensorWave, raising fresh discussion about the company’s financing risks.
- Fermi secured its inaugural binding tenant lease, valued at approximately $6.5 billion.
- TensorWave is set to draw 222 MW in phases beginning in late 2027.
- Fermi stock gained 16.2% to trade at $6.84 in early session on Nasdaq.
- The lease is still subject to project guarantees and securing financing.
Fermi Inc. NASDAQ:FRMI has entered into a 15-year data-center lease agreement with TensorWave. The initial stage represents approximately $6.5 billion in contracted revenue, with total facility power at 222 megawatts.
The agreement eliminates the most pressing uncertainty about Project Matador: the absence of an anchor tenant. However, it introduces a new challenge. Fermi needs to fund and complete the site prior to the commencement of rent.
By 9:45 a.m. EDT, shares were up 16.2% at $6.84. Despite the gain, the increase recouped just a portion of the drop from Fermi’s $21 IPO last October.
| Lease measure | Phase-one term | Investor reading |
|---|---|---|
| Contracted revenue | About $6.5 billion | Does not factor in renewals or expansion |
| Initial term | 15 years | Term begins once all deliveries have been completed |
| Average annual contracted revenue | About $433 million | Calculated as a simple average, not a management projection |
| Total facility power | 222 MW | Represents 3.7% of the currently permitted 6 GW |
| Revenue per MW over initial term | About $29.3 million | Calculated as a basic contract-value comparison |
| Delivery | In stages from the second half of 2027 | Construction and funding occur prior to use |
| Renewal options | Two possible five-year extensions | Not counted toward the $6.5 billion total |
The annual and per-megawatt values are calculated by dividing the announced contract amount by its duration and power output. These numbers do not represent revenue projections. Leasing terms require project guarantees and funding.
The economics are significant compared to Fermi’s valuation. With shares priced at $6.84 and 637.6 million outstanding as of May, the company’s market capitalisation was approximately $4.36 billion. The value of the phase-one contract is about 1.5 times higher than that.
| Market comparison | Value | Reference point |
|---|---|---|
| FRMI last traded price | $6.84 | 9:45 a.m. EDT on August 11 |
| Change for the session | +16.2% | Since market open |
| IPO launch price | $21.00 | September 2025 initial offering |
| Estimated equity value | $4.36 billion | Calculation: price multiplied by May outstanding shares |
| Phase-one contract size | $6.5 billion | Approximately 149% of estimated equity value |
| Year-to-date change before Tuesday | -27% | Traded below January levels starting the session |
Fermi’s live quote and analyst information are sourced from S&P Global. The IPO collected $682.5 million with shares priced at $21 each. According to Barron’s, the stock fell 27% this year as of Tuesday.
The ratio is not a measure of profit. Revenue under contract will be received across 15 years. Fermi is required to cover construction expenses, run the campus, and meet lease requirements beforehand.
Chairman Marius Haas described the lease as “a tremendous vote of confidence in Fermi.” He stated it fulfilled the main goal management established in May. Fermi release
TensorWave CEO Darrick Horton described the situation plainly: “Power is the critical constraint in AI infrastructure.” The company intends to install tens of thousands of Advanced Micro Devices, Inc. NASDAQ:AMD Instinct processors at the facility. Fermi release
Further expansion might increase the scale once more. Securing rights for two additional data centers could push the partnership’s total to over 650 MW, nearly tripling the capacity from phase one.
| Financial capacity | March 31, 2026 | December 31, 2025 | Quarter change |
|---|---|---|---|
| Property, plant and equipment | $1.431 billion | $935.3 million | +$495.6 million |
| Cash and cash equivalents | $207.5 million | $408.5 million | -$201.0 million |
| Restricted cash | $35.8 million | — | +$35.8 million |
| Debt, net | $421.3 million | $109.8 million | +$311.5 million |
| Quarterly net loss | $(188.7) million | Not comparable | At pre-revenue development stage |
The funding test appears on the balance sheet. Fermi’s first-quarter expenditures on property and equipment totaled $441.2 million. By the end of March, the company reported cash and restricted cash of $243.3 million.
The newest update reports over $1.5 billion invested to date. Approximately 6 GW of the intended 17 GW has secured permits, with initial power generation still scheduled for 2026. These numbers refer to the broader site, not just TensorWave’s phase.
| Analyst | Firm | Rating | Price target | Date |
|---|---|---|---|---|
| Brett Knoblauch | Cantor Fitzgerald | Buy | $8 | August 11 |
| Vikram Malhotra | Mizuho | Buy | $11, cutting from $27 | July 28 |
| Nicholas Amicucci | Evercore ISI | Hold | $11 | July 27 |
| Stephen Gengaro | Stifel | Buy | $17, lowered from $29 | June 23 |
| John Hodulik | UBS | Hold | $6, reduced from $8 | May 5 |
Analysts hold divergent opinions. Eight analysts rate the stock a Buy, setting an average price target of $17. Expectations span from $6 up to $35. Cantor issued an $8 target the same day, just 17% higher than the early-session price.
Risks. Fermi is still pre-revenue and operates from a single location in Texas. Revenue could be delayed due to construction expenses, financing challenges, tenant guarantees, changes in leadership, or permitting issues. TensorWave’s creditworthiness and customer demand also play important roles over the duration of the lease.
The agreement formally addresses the tenant issue. The focus now shifts to implementation. Fermi’s August 13 quarterly update is expected to outline plans for financing 2026 power delivery and 2027 occupancy, while safeguarding the interests of present shareholders.
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