Fermi shares plunge 13% on $486mn net loss

{"text":[[{"start":12.15,"text":"Shares in data centre real estate group Fermi plunged about a fifth on Monday on mounting investor concerns over growing costs and its lack of a tenant for its massive AI campus."}],[{"start":25.08,"text":"The stock fell as much as 24 per cent in morning trading before paring back some losses after the company, co-founded by former US energy secretary Rick Perry, announced a net loss of $486mn in fiscal year 2025. The shares closed down 13 per cent on Monday in New York."}],[{"start":49.31999999999999,"text":"The Texas-based company has yet to sign a tenancy agreement for its planned data centre campus in Amarillo, Texas, which would offer up to 17 gigawatts of nuclear, natural gas and renewable-powered electricity."}],[{"start":64.47,"text":"In December a potential client terminated a $150mn agreement to help fund construction. A letter of intent with the client for a 20-year lease remains in place. "}],[{"start":77.45,"text":"Fermi on Monday said it is “in active discussions” with several unidentified cloud operators, AI infrastructure groups and chipmakers. "}],[{"start":88.84,"text":"“Our focus is not on whether we will secure a tenant, but on securing the right one,” the company added."}],[{"start":96.23,"text":"Chief executive Toby Neugebauer sought to reassure investors on an earnings call on Monday, saying that while “it’s clear that there have been issues with the stock . . . I can’t overstate how seriously I take it.”"}],[{"start":110.86,"text":"“I also can’t be too focused on the day-to-day fluctuations. We are building a consequential company to solve a critical need for our customers, to protect consumers and to serve our country.”"}],[{"start":124.44,"text":"The Amarillo campus, dubbed “Project Matador” would be the world’s largest data centre campus, with a building cost of more than $50bn. The project was provisionally named the President Donald J Trump Advanced Energy and Intelligence Campus."}],[{"start":142.67,"text":"The site’s development comes as tech giants hunt for huge amounts of power that can be brought online as quickly as possible to train and run AI models. "}],[{"start":153.95,"text":"However, investors have raised concerns over the company’s ability to compete with more established providers. "}],[{"start":null,"text":"

"}],[{"start":162.13,"text":"Fermi’s market capitalisation has plunged to about $3.2bn from a peak of more than $19bn on the day of the company’s explosive initial public offering in October."}],[{"start":175.22,"text":"In its IPO prospectus, filed with US regulators, it namechecked Elon Musk’s xAI, Sam Altman’s OpenAI and start-up Anthropic as potential tenants on its Amarillo campus. It also acknowledged that “competitors may have greater access to capital, more established tenant bases, deeper vendor relationships and fewer regulatory hurdles”."}],[{"start":198.6,"text":"“We’ve viewed Fermi as a meme-like stock since its IPO,” said David Auerbach, chief investment officer at Connecticut-based real estate investment trust Hoya Capital."}],[{"start":212.18,"text":"“Digital Realty Trust and Equinix, the two 800lb gorillas in the data centre [real estate investment trust] space, [are] established platforms with global relationships, planting flags in new countries every quarter, not having issues generating power,” he added. “I feel like it’s going to be very hard for Fermi to find its footing.” "}],[{"start":234.36,"text":"Fermi said it expects tenant revenue from 2027. "}],[{"start":239.45000000000002,"text":"All 11 analysts who rate the stock have assigned Fermi a “buy” rating, with price targets ranging from $20 to $35 per share."}],[{"start":259.49,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1774945346_2824.mp3"}