Shares of Fermi Inc., an AI energy infrastructure company co-founded by former Trump administration Energy Secretary Rick Perry, plummeted as much as 46% intraday on Friday, narrowly avoiding a "single-day halving" of its stock price. The immediate trigger for the crash was the company's disclosure that its anchor tenant had withdrawn approximately $150 million in construction funding commitments.
**Funding Withdrawal Sparks Valuation Crisis** Fermi's Friday announcement revealed that its first major tenant terminated a $150 million funding agreement originally earmarked for the construction of its large-scale AI campus in West Texas. The news sent Fermi's stock into a steep intraday dive. Although losses moderated by the close, the stock has now retreated 70% from its post-IPO peak in October. In an attempt to stabilize investor sentiment, Fermi's management emphasized that while the tenant refused construction funding, lease negotiations remain ongoing and have not completely collapsed. Notably, during its October IPO debut, CEO Tony Neugebauer had publicly claimed to the Financial Times that Fermi had secured "one of the most valuable and respected tech companies on Earth" as a client.
**Wall Street's Divided Sentiment: 100% Buy Ratings vs. 38% Short Interest** Despite all nine Wall Street firms covering the stock maintaining "Buy" ratings, short sellers have aggressively targeted Fermi. Bloomberg data shows roughly 38% of its float is sold short. Ocean Wall, Fermi's investment advisor, downplayed the sell-off, with CEO Nick Lawson arguing that while market sentiment is weak, the structural "power shortage" thesis underpinning AI computing demand remains intact—and Fermi remains strategically positioned. Cantor Fitzgerald analysts defended the company, stating the deal collapsed due to the tenant demanding pricing changes, which Fermi refused. They framed this as "pricing discipline," avoiding a precedent that could undervalue its future gigawatt-scale capacity.
**Political Ties and a $50 Billion Gamble** Beyond its AI narrative, Fermi carries strong political undertones. Co-founder Rick Perry previously served as Texas governor and U.S. Energy Secretary under Trump. The company even preliminarily branded its energy hub the "President Donald J. Trump Advanced Energy and Intelligence Campus." Commercially, Fermi has pitched an audacious vision: building the world’s largest energy-data complex in Amarillo, Texas, with a projected $50+ billion budget. Plans include four Westinghouse AP1000 nuclear reactors, integrating nuclear, natural gas, and renewables to generate 11 gigawatts—surpassing Portugal’s peak national electricity demand. Yet Friday’s crash served as a stark reminder: until grand visions materialize, any funding disruption can trigger violent valuation resets.
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