Amarillo, August 12, 2026, 04:18 CDT
- Fermi jumped 21.1% after securing its inaugural binding lease agreement with a customer.
- TensorWave signed a 15-year contract for 222 MW, valued at approximately $6.5 billion.
- The lease is still contingent on securing project guarantees and funding.
Fermi Inc. NASDAQ:FRMI surged 21.1% on Tuesday after announcing TensorWave as Project Matador’s initial binding customer. The AI cloud company agreed to a 222-megawatt data center contract valued at nearly $6.5 billion across 15 years. The phased rollout will commence in the second half of 2027.
The headline figure is significant. Distributed evenly, the contract accounts for around $433 million in yearly revenue, not including ramp timing and associated costs. Fermi spent $441 million on property and equipment just in the first quarter.
This serves as the financing check. While the lease confirms demand, Fermi must still secure funds for construction prior to the start of rent payments. Project guarantees and other standard conditions are also required.
U.S. markets are closed. Shares last ended Tuesday at $7.12, climbing 3% to $7.33 in early premarket action. Volume was 2.5 times higher than the three-month average.
| Market measure | Value | Investor reading |
|---|---|---|
| August 11 close | $7.12 | Session gain of 21.09% |
| One-week move | +12.84% | Up from $6.31 on August 4 |
| Trading volume | 49.1 million | 2.52 times typical three-month volume |
| Versus $21 IPO price | -66.1% | Recent jump covers only part of drop |
| Market capitalization | $4.54 billion | Lease book is 1.43 times larger than market cap |
Price and volume figures are sourced from S&P Global and Yahoo Finance. Fermi set the price for its September 2025 offering at $21. The lifetime contract sum does not represent present value, profit, or imminent cash flow.
Chairman Marius Haas said, “A lease of this magnitude and duration represents significant confidence in Fermi.” He stated that TensorWave is the anchor customer for whom the project was planned. Company release
| Project measure | Capacity | Share of 17 GW target |
|---|---|---|
| Phase-one binding lease | 222 MW | 1.31% |
| Lease and optional expansion | Over 650 MW | Over 3.82% |
| Market power after Hillcore partnership | Roughly 4.8 GW | 28.24% |
| Permits already secured | Roughly 6 GW | 35.29% |
| Full campus goal | 17 GW | 100% |
The initial lease includes a limited portion of the proposed campus. Expansion options might increase its capacity to over 650 MW. The first building will house tens of thousands of Advanced Micro Devices, Inc. NASDAQ:AMD Instinct graphics processing units.
Fermi secured an additional financing bridge on Tuesday evening. Hillcore Energy Capital has committed to developing a 2.6-gigawatt power facility under a build-own-operate-transfer agreement. Under the arrangement, Hillcore will provide funding for the project, with Fermi purchasing electricity as tenant lease agreements are finalized.
The arrangement caps Fermi’s initial capital outlay. The deal remains pending as parties need to sign constituent agreements and secure standard approvals.
“Hillcore is responsible for funding, constructing, and running the plant,” Fermi co-president and chief operating officer Jacobo Ortiz said. He added the deal allows Fermi to maintain its balance sheet. Source
| Q1 2026 funding measure | Amount | Why it matters |
|---|---|---|
| Cash | $207.5 million | Liquid funds with no restrictions |
| Restricted cash | $35.8 million | For specified purposes only |
| Debt, net | $421.3 million | Outstanding debt burden |
| Property and equipment | $1.43 billion | Investments in infrastructure completed |
| Quarterly capital investment | $441.2 million | 1.81× gross cash holdings |
| Net loss | $188.7 million | Primarily stock-based expenses |
Fermi reported no revenue up to March. According to its quarterly filing, existing resources did not cover obligations due within one year ahead of management’s financing strategies. The company arranged $785 million in equipment facilities and obtained a $156 million commitment from Yorkville.
| Analyst | Firm | Rating | Target | Upside/downside |
|---|---|---|---|---|
| Brett Knoblauch | Cantor Fitzgerald | Buy | $8 | +12.4% |
| Vikram Malhotra | Mizuho | Buy | $11 | +54.5% |
| Nicholas Amicucci | Evercore ISI | Hold | $11 | +54.5% |
| Stephen Gengaro | Stifel | Buy | $17 | +138.8% |
| John Hodulik | UBS | Hold | $6 | -15.7% |
All eight analysts monitored by S&P Global hold a Buy consensus and set an average price target of $17. In contrast, Cantor’s latest $8 target is much more cautious. This spread illustrates the significant impact of financing assumptions on valuation.
Risks: The TensorWave lease is contingent on guarantees and funding. Deliveries are set to start in the second half of 2027 at the earliest. Delays in the project, tenant credit risks, potential dilution, and increased financing expenses could impact returns.
Fermi’s current milestone is not customer demand, but turning the 222-megawatt lease into a financed construction project while avoiding another quarter in which capital expenditures outpaced total available cash.
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