Fermi Stock Plummets 41% Amid Project Setbacks and Tenant Loss

Shares of Fermi (NASDAQ: FRMI) fell sharply in March, plummeting 41% as the company grapples with setbacks in its ambitious project to build a private power grid for AI data centers. The real estate investment trust (REIT), which went public in early 2025, has yet to generate any revenue and recently lost one of its initial tenants for the project. Fermi aims to construct a massive power-generation facility in remote Texas, named Project Matador, to directly supply energy to data centers. However, the company has struggled to secure long-term contracts despite the growing demand for AI infrastructure. An initial tenant had committed $150 million upfront but has since pulled out, raising concerns about Fermi’s ability to attract and retain customers. The company raised $750 million in its initial public offering (IPO) to fund the project, but it has burned through approximately $600 million in free cash flow in its first year of operation. With no revenue and significant capital expenditures ahead, investors are growing skeptical about Fermi’s path to profitability. The stock has now fallen by more than 80% from its peak, and the upcoming lock-up expiration from the IPO could further pressure the share price as insider shares become available for sale. Fermi’s long-term potential remains tied to the success of Project Matador, which aims to expand to 17 gigawatts of power capacity using a mix of natural gas, renewables, and nuclear energy. However, the lack of immediate results and ongoing financial losses have led analysts to question whether the company is a viable investment at this stage.