Fermi (NASDAQ:FRMI) Shares Gap Up - Time to Buy?

Key Points

• Fermi shares surged 22% after the company signed a binding 222-megawatt data-center lease with TensorWave, representing approximately $6.5 billion in contracted revenue over 15 years. The relationship could expand to more than 650 MW, with some obligations potentially guaranteed by a global AI company.
• The agreement boosts confidence in Fermi’s planned Texas AI campus, but its value depends on securing financing and power, completing construction, and executing the project successfully. Fermi remains loss-making, faces potential cost overruns and delays, and recently missed quarterly EPS estimates.
• Analyst sentiment is mixed: the consensus rating is “Moderate Buy” with a $20.67 target price, although several firms have recently lowered targets or ratings. Insiders sold more than 1 million shares over the past quarter, while major institutions including BlackRock established or increased positions.

Fermi Inc. (NASDAQ:FRMI - Get Free Report) gapped up prior to trading on Tuesday . The stock had previously closed at $5.88, but opened at $7.07. Fermi shares last traded at $7.19, with a volume of 15,653,336 shares traded.

Key Fermi News

Here are the key news stories impacting Fermi this week:

• Positive Sentiment: Fermi signed a binding lease with TensorWave subsidiary TensorWave TEX1 for a data center supported by 222 megawatts of power. The first phase is expected to begin delivering a turnkey facility in the second half of 2027 and represents approximately $6.5 billion in contracted revenue, reportedly over a 15-year term. Fermi Announces Binding Lease Agreement with TensorWave
• Positive Sentiment: The companies intend to expand the relationship across three phases to more than 650 MW. Fermi also said certain lease obligations are expected to be guaranteed by a global AI leader, potentially improving the agreement’s credibility and financing appeal. Fermi signs agreement with TensorWave
• Positive Sentiment: The announcement triggered a sharp after-hours rally and continued gains as investors viewed the lease as evidence that Fermi can attract AI customers to its proposed 17-gigawatt Texas campus. Fermi Signs First Binding Lease Agreement
• Neutral Sentiment: The agreement is a significant commercial milestone, but much of the value remains dependent on construction, financing, power availability, customer guarantees, and successful project execution. The initial 222-MW phase is only a portion of Fermi’s broader campus ambitions. Fermi Signs Its First Tenant, But Significant Execution Risks Remain
• Negative Sentiment: Fermi remains a speculative, loss-making company: it recently reported a larger-than-expected quarterly loss, and analysts expect another loss for the current fiscal year. Nuclear-power development, cost overruns, funding needs, and delays could limit the lease’s eventual financial benefit.

Analysts Set New Price Targets

A number of equities analysts recently commented on the company. Weiss Ratings restated a "sell (d-)" rating on shares of Fermi in a report on Thursday, July 2nd. Mizuho cut their price target on shares of Fermi from $27.00 to $11.00 and set an "outperform" rating on the stock in a report on Tuesday, July 28th. UBS Group cut shares of Fermi from a "buy" rating to a "neutral" rating and set a $6.00 price target on the stock. in a report on Tuesday, May 5th. Stifel Nicolaus decreased their price objective on shares of Fermi from $29.00 to $17.00 and set a "buy" rating for the company in a report on Tuesday, June 23rd. Finally, Wall Street Zen cut shares of Fermi from a "hold" rating to a "sell" rating in a research report on Sunday, May 10th. Two investment analysts have rated the stock with a Strong Buy rating, seven have given a Buy rating, three have issued a Hold rating and one has given a Sell rating to the company. According to MarketBeat, the company currently has a consensus rating of "Moderate Buy" and a consensus target price of $20.67.

Fermi Stock Up 22.0%

The company has a market capitalization of $4.57 billion and a P/E ratio of -6.36. The company has a 50-day moving average of $7.14 and a two-hundred day moving average of $7.24.

Fermi (NASDAQ:FRMI - Get Free Report) last posted its quarterly earnings data on Thursday, May 14th. The company reported ($0.30) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.05) by ($0.25). As a group, equities analysts expect that Fermi Inc. will post -0.33 EPS for the current fiscal year.

Insider Activity

In other Fermi news, Director James Richard Perry sold 863,637 shares of the company's stock in a transaction dated Tuesday, June 30th. The shares were sold at an average price of $7.31, for a total value of $6,313,186.47. Following the sale, the director owned 15,827,807 shares in the company, valued at approximately $115,701,269.17. This represents a 5.17% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, insider Mesut Uzman sold 79,509 shares of the company's stock in a transaction dated Wednesday, June 3rd. The stock was sold at an average price of $6.31, for a total transaction of $501,701.79. Following the completion of the sale, the insider owned 670,491 shares in the company, valued at approximately $4,230,798.21. This trade represents a 10.60% decrease in their position. The SEC filing for this sale provides additional information. Over the last quarter, insiders sold 1,022,178 shares of company stock valued at $7,313,580.

Institutional Trading of Fermi

Several hedge funds and other institutional investors have recently made changes to their positions in the stock. BlackRock Inc. purchased a new position in Fermi during the second quarter valued at $38,499,000. Weiss Asset Management LP grew its stake in shares of Fermi by 431.6% in the first quarter. Weiss Asset Management LP now owns 2,415,027 shares of the company's stock worth $14,104,000 after acquiring an additional 1,960,764 shares during the last quarter. Balyasny Asset Management L.P. purchased a new stake in shares of Fermi in the fourth quarter worth $16,549,000. M&G PLC bought a new position in shares of Fermi during the fourth quarter valued at $14,443,000. Finally, Texas Capital Bank Wealth Management Services Inc bought a new position in shares of Fermi during the second quarter valued at $13,334,000.

About Fermi

Fermi's mission is to power the artificial intelligence (“AI”) needs of tomorrow. We are an advanced energy and hyperscaler development company purpose-built for the AI era. Our mission is to deliver up to 11 gigawatts (“GW”) of low-carbon, HyperRedundant™, and on-demand power directly to the world's most compute-intensive businesses with 1.1 GW of power projected to be online by the end of 2026. We have entered into a long-term lease on a site large enough to simultaneously house the next three largest data center campuses by square footage currently in existence.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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