Fermi Inc. Plunges 15.61% as AICA Termination Sparks Legal Probe and Investor Doubt

The share price of Fermi Inc. (NASDAQ: FRMI) fell to a record low this month, with an intraday decline of 9.71% on 20 December, marking its second consecutive day of losses. The stock has now fallen 15.61% over the past two trading sessions, reflecting growing investor skepticism about the company’s ability to advance its flagship Project Matador.

The recent selloff follows the termination of a $150 million Advanced in Aid of Construction Agreement (AICA) with an unnamed “First Tenant” for the energy and data center project. This agreement, announced in mid-November as a cornerstone of the initiative, was critical for funding infrastructure development and reducing Fermi’s reliance on equity financing. The abrupt cancellation on 11 December has raised questions about the project’s viability and the company’s transparency, with no public explanation provided for the tenant’s exit.

Compounding concerns, a shareholder rights firm, Hagens Berman, has launched an investigation into potential investor misrepresentation, alleging Fermi overstated the security of the AICA in November communications. The probe underscores legal and reputational risks for the company, which raised $784 million in its October 2025 IPO. Analysts note the termination of the AICA has not only disrupted immediate funding plans but also eroded confidence in Fermi’s execution capabilities, particularly as the project’s success hinges on attracting high-profile partners to offset its capital-intensive scope.

Market reaction has been swift and severe, with the stock’s decline reflecting broader sector skepticism toward speculative tech and energy plays. Without a clear contingency plan or alternative funding sources, Fermi faces heightened pressure to demonstrate Project Matador’s scalability and financial sustainability. The ongoing legal scrutiny and lack of clarity around the tenant’s withdrawal further amplify uncertainty, leaving investors to weigh the company’s long-term prospects against its current challenges.