Fermi (FRMI) Shares Reverse 7.78% Plunge, Rise 6.91% on Regulatory Progress and AI Energy Vision

Fermi (FRMI) shares rose 6.91% on Tuesday, reversing earlier intraday losses that had pushed the stock to a record low with a 7.78% decline. The volatility underscores the market’s cautious optimism around the Texas-based AI infrastructure startup’s ambitious energy vision and regulatory progress.

The company’s Project Matador—a multi-gigawatt data center campus in the Texas Panhandle—remains central to its growth narrative. The project’s grid-independent HyperRedundant™ infrastructure, combining natural gas, nuclear, solar, and battery storage, aims to meet the energy demands of AI workloads. Proximity to the Pantex Plant and a 5,236-acre site with access to natural gas fields and solar corridors position Fermi to leverage low-carbon power and skilled labor, enhancing its appeal to AI developers and cloud providers.

Regulatory momentum has bolstered investor confidence, with the U.S. Nuclear Regulatory Commission accepting Fermi’s Combined License Application for 4 GW of nuclear power. This marks a critical step toward its goal of delivering 1.1 GW by 2026 and scaling to 11 GW by 2038. However, the company faces challenges in securing enforceable tenant agreements and financing its $50–$70 billion capital needs, as nonbinding letters of intent remain the only confirmed demand.

While Fermi’s REIT structure offers tax advantages and aligns with institutional investor preferences, its pre-revenue status and reliance on speculative AI demand have drawn skepticism. Analysts highlight risks such as supply chain constraints, labor shortages, and macroeconomic shifts that could delay timelines or dampen demand. Despite these hurdles, the stock’s post-IPO valuation of $17 billion reflects market enthusiasm for its dual-revenue model of energy and data center leasing.

Investor sentiment remains divided. Bullish observers emphasize the company’s strategic energy mix and political connections, including co-founder Rick Perry’s energy policy ties. Skeptics, however, caution that Fermi’s success hinges on navigating regulatory complexities and converting speculative interest into operational stability. The stock’s recent volatility highlights the delicate balance between its visionary infrastructure and the realities of execution risks in a capital-intensive sector.