<div id="readability-page-1" class="page">Money Markets Buy, Sell, or Hold Fermi Stock?  ByTrefis Team ,  Contributor.  Forbes contributors publish independent expert analyses and insights. Building a platform to do the job of 1 million analysts for  Great Speculations Follow Author Oct 07, 2025, 05:00am EDT Share Save Comment  The staff of the power supply company conducts a routine inspection of the newly built pole section transmission line of the 500 kV Sanqiu Chateng Line in Nanjing, Jiangsu Province, China, on September 12, 2025. (Photo by Costfoto/NurPhoto via Getty Images) NurPhoto via Getty Images Fermi Inc., (NASDAQ: FRMI), a Texas-based AI infrastructure startup co-founded by former U.S. Energy Secretary Rick Perry, recently had a successful IPO. Just a few months after its founding in January, the company went public last week, generating robust investor interest despite its infancy and absence of revenue. Shares jumped 55% on their initial trading day to close at around $32.50 per share, significantly higher than the $21 initial offering price, although they have since decreased to approximately $28 per share as of now. Fermi’s market reception underscores the increasing investor enthusiasm for artificial intelligence infrastructure investments. Given that this company has no revenue and no operational history, the excitement surrounding its launch prompts the question: what precisely are investors wagering on?  Reinventing Data Center Power for the AI Era At the center of Fermi’s approach is Project Matador, also referred to as the “HyperGrid,” a hyperscale data center campus located in the Texas Panhandle. The company's business model focuses on leasing extensive data center space and integrated computing infrastructure to clients like AI developers, cloud service providers, and semiconductor companies. Unlike conventional data centers that heavily rely on strained public utility grids, Fermi intends to establish its own private power supply.  The company plans to operate a combination of natural gas facilities, nuclear power plants, solar energy farms, and battery storage—creating a grid-independent, highly dependable system designed to meet the energy demands of AI workloads. Fermi calls this strategy HyperRedundant, guaranteeing continuous service even if the public grid experiences failures. Project Matador is projected to generate 1.1 gigawatts of power by 2026, with a long-term goal of reaching 11 gigawatts and 18 million square feet of space by 2038. For context, CEO Toby Neugebauer asserts that the site could eventually yield twice as much electricity as all the power plants presently servicing New York City.  This ambition mirrors the immense energy requirements of AI. Training a single large model can utilize as much electricity as hundreds of American households consume in a year. As models expand in size and are retrained more frequently, the infrastructure for data centers must scale significantly and remain exceptionally reliable, since even short power outages can hinder AI research and cloud services.  Considerable Risks Nevertheless, the outlook carries significant risks. Fermi has no operational history and is still in the pre-revenue phase, with construction ongoing. Its plans require substantial capital—estimated at $50 to $70 billion over time, which includes $30 to $35 billion just for nuclear capabilities. Financing, construction, and regulatory challenges are substantial, and a project of this magnitude may encounter supply chain impediments, labor shortages, fluctuating debt markets, and protracted approval processes for nuclear facilities. In addition, customer risk introduces another layer of uncertainty.  MORE FOR YOU To date, Fermi has only secured nonbinding letters of intent, with no definitive tenant contracts. Without enforceable agreements, demand and cash flows remain unpredictable. Lastly, demand risk is a concern—data center leasing and power revenues are contingent upon the broader economic landscape and the speed of AI adoption. While demand seems robust at the moment, a slowdown in the advancement of AI technology could negatively impact long-term growth rates.  In conclusion, Fermi represents a highly speculative investment opportunity. Valued at around $17 billion, the company seeks to address AI’s substantial power needs through one of the most ambitious private energy initiatives ever envisioned. That being said, the recent surge in stock price reflects strong investor excitement regarding the potential of its vision, rather than proven operational success. The company benefits from the credibility and strategic advantages provided by its founders, including former U.S. Energy Secretary Rick Perry, which may assist in regulatory, financing, and policy endeavors. This positions the stock as a very high-risk, high-reward play at this time.  The Trefis High Quality (HQ) Portfolio , featuring a collection of 30 stocks, has a proven history of comfortably exceeding its benchmark, which includes all three—S&amp;P 500, Russell, and S&amp;P midcap indexes—and has yielded returns surpassing 91% since its inception. What accounts for this? As a group, HQ Portfolio stocks have delivered superior returns with reduced risk compared to the benchmark index; less of a roller-coaster experience, as shown in HQ Portfolio performance metrics.  Editorial Standards Reprints &amp; Permissions LOADING VIDEO PLAYER... FORBES’ FEATURED Video</div>

FRMI

<p>Fermi Inc., an AI infrastructure startup, recently went public with a successful IPO, seeing shares rise 55% on the first trading day. The company aims to provide a private power supply for data centers through Project Matador, which plans to generate 1.1 gigawatts of power by 2026. However, Fermi faces significant risks, including lack of operational history, high capital requirements, and uncertain demand. Despite strong investor enthusiasm, the stock is considered a high-risk, high-reward investment opportunity.</p>