Fermi (FRMI) Surges 11.9% Amid Volatile Intraday Action—What’s Fueling the Rally?

Summary
• Fermi (FRMI) rockets 11.875% to $8.95, hitting a 52-week high of $9.151
• Turnover surges to 5.97M shares, with RSI at 19.6 (oversold) and MACD at -2.816
• Sector leader Microsoft (MSFT) plummets 2.71%, contrasting FRMI’s rally

Fermi’s explosive intraday move defies a weak Application Software sector, as the stock claws back from a 52-week low of $7.28. With options activity intensifying and technical indicators flashing mixed signals, traders are scrambling to decipher whether this rally is a short-term rebound or a catalyst-driven breakout.

Options-Driven Volatility Ignites FRMI’s Sharp Rebound
Fermi’s 11.9% surge is fueled by aggressive call option buying, particularly in the FRMI20260515C10 and FRMI20260220P10 contracts. The FRMI20260515C10 call option, with a 30.89% price change ratio and 3.61% leverage ratio, shows heavy institutional positioning, while the FRMI20260220P10 put option’s 155.95% implied volatility ratio suggests a short-term volatility spike. Despite a short-term bearish trend (RSI: 19.6, MACD: -2.816), the stock’s rebound to $8.95—just 1.5% below its 52-week high—indicates a potential reversal triggered by options-driven liquidity.

Application Software Sector Weak as Microsoft Drags, But FRMI Defies Trend
The Application Software sector is under pressure, with Microsoft (MSFT) down 2.71% amid broader tech sector jitters. However, Fermi’s 11.9% rally starkly contrasts this weakness, suggesting sector-specific catalysts or options-driven momentum. While MSFT’s decline reflects macroeconomic concerns, FRMI’s move appears decoupled from sector fundamentals, pointing to speculative positioning rather than earnings or product news.

Capitalizing on FRMI’s Volatility: ETFs and Options for the Aggressive Trader
• RSI: 19.6 (oversold)
• MACD: -2.816 (bearish), Signal Line: -2.957 (bullish crossover), Histogram: 0.141 (positive divergence)
• Bollinger Bands: Price at $8.95 (near lower band of $3.983)
• 30D MA: $12.54 (price below trend)

Fermi’s technicals suggest a potential short-term rebound off oversold levels. Key resistance lies at the 30D MA ($12.54) and 52-week high ($9.151). The FRMI20260515C10 call option (strike: $10, expiration: 2026-05-15) stands out with a 30.89% price change ratio, 3.61% leverage ratio, and 130.05% implied volatility. Its delta of 0.6118 and gamma of 0.053849 indicate sensitivity to price movement, while high turnover ($596,857) ensures liquidity. A 5% upside to $9.395 would yield a payoff of $0.395 per contract. The FRMI20260220P10 put option (strike: $10, expiration: 2026-02-20) also merits attention, with 155.95% implied volatility and a -0.4516 delta, offering bearish protection if momentum stalls. Aggressive bulls may consider FRMI20260515C10 into a break above $9.151.

Backtest Fermi Stock Performance
The performance of Fermi Inc. (NASDAQ:FRMI) after a 12% intraday surge from 2022 to now can be summarized as follows:1. Recent Surge: FRMI has experienced a notable surge, with a 16.4% increase on December 16, 2025, and a previous 11.1% jump on December 5, 2025. These gains suggest a recent positive momentum in the stock's performance.2. Analyst Ratings and Price Targets: Analysts have provided mixed ratings, with Evercore ISI initiating coverage with an "Outperform" rating and a price target of $37.00, indicating potential for further price appreciation. However, other analysts have set price targets lower than $35.00, which may suggest a more cautious outlook.3. Market Performance: The stock's performance has been volatile, with a significant decline in trading volume on December 16, 2025, compared to average session volumes. This could indicate a lack of consistent investor interest or confidence in the stock's long-term prospects.4. Financial Health: The company's financial health has been a concern, with reported earnings per share (EPS) of ($0.84) for the quarter as of November 10, 2025. This negative EPS could be a factor in the stock's performance, as it may indicate operational challenges or risks that investors are wary of.5. Thematic Alignment: FRMI's focus on powering AI needs for the future could position it well within the growing AI and datacenter power demand ecosystem. However, this thematic alignment may not immediately reflect in the stock's performance, as it requires time to see the fruition of these strategic efforts.In conclusion, while FRMI has shown recent positive momentum and has potential for growth based on its strategic positioning, the stock's performance will likely be influenced by various factors, including analyst sentiment, market conditions, and the company's ability to execute its strategic plans. Investors should exercise caution and consider these factors when evaluating FRMI's performance post-2022 surge.

FRMI’s Volatility Presents High-Risk, High-Reward Opportunities—Act Fast
Fermi’s 11.9% rally, driven by options liquidity and oversold technicals, hints at a potential short-term reversal. However, the stock remains 30% below its 52-week high and faces a bearish 30D MA at $12.54. Traders should monitor the 52-week low ($7.28) as a critical support level and watch Microsoft’s (-2.71%) performance for sector sentiment. For those with a high-risk appetite, FRMI20260515C10 offers leveraged exposure to a potential breakout, but caution is warranted given the stock’s -11.67 P/E ratio and lack of fundamental catalysts. Immediate action: Watch for a close above $9.151 or a breakdown below $8.02.