Fermi (FRMI 6.63%) is perhaps among the few artificial intelligence (AI) stocks you'd not have heard about until its recent wild price swings. The stock soared 17.2% at its highest point in trading on Tuesday, but that's after a 44% plunge over the previous two trading days. Is this a dead cat bounce or an opportunity to buy Fermi before it's too late?
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What does Fermi do, and what's going on with its stock?
Fermi is building what it claims will be the world's largest next-generation private power grid with an 11-gigawatt capacity. Its Project Matador campus in Texas will integrate a mix of natural gas, nuclear energy, solar power, and battery storage to deliver on-site power to hyperscalers, supporting the voracious power needs of AI data centers.
Here's what happened last week: Fermi revealed that its first prospective tenant to lease a portion of the Project Matador campus for 20 years has terminated its advance construction agreement under which it had agreed to pay up to $150 million to Fermi to fund construction costs.
NASDAQ: FRMI
Key Data Points
Fermi stock plunged after the development. After all, the first potential anchor customer walking away may seem like a red flag for a pre-revenue start-up. The stock, however, rebounded on Tuesday as investors believe Fermi could still succeed.
Is Fermi a good stock to buy?
Fermi said it was still negotiating a lease agreement with the said party that terminated the deal. Moreover, despite losing out on the crucial $150 million in funding, Fermi believes it should still be able to build the Project Matador campus and meet its planned power delivery targets. In November, Fermi said it expects to deliver the first power from the campus in 2026 . Fermi has also signed up some customers, including a subsidiary of Xcel Energy (XEL 0.41%), for a supply of up to 200 megawatts of electrical capacity from the campus.
Fermi, however, has yet to generate its first sales and, therefore, remains a highly speculative bet and best watched from the sidelines for now. Also, there's another reason why Fermi stock is so volatile – it became public only in October 2025, and the prices of newly listed stocks can sway faster than investor sentiment.
