Fermi Inc. (FRMI), a data center real estate investment trust co-founded by former Texas Governor Rick Perry, is making waves in its Nasdaq debut on Wednesday, with shares soaring 19.05% in intraday trading. This strong performance comes after the company priced its initial public offering (IPO) at $21 per share, raising $682.5 million and achieving a valuation of approximately $12.5 billion.
The enthusiasm for Fermi's stock reflects the growing investor appetite for AI-related infrastructure plays. Despite being a pre-revenue company founded just 10 months ago, Fermi has captured market attention with its ambitious plans to build the world's largest energy and data complex. The company aims to power AI data centers using a combination of nuclear, natural gas, and solar energy sources.
Analysts attribute the stock's surge to several factors. Matt Kennedy, senior strategist at Renaissance Capital, noted, "It speaks to the gold rush happening in AI infrastructure right now. It's a cash geyser." The company's political connections, including Rick Perry's involvement, and its strategic location in the Texas Panhandle with access to major natural gas pipelines have also been cited as positive factors.
However, investors should be aware of the risks associated with Fermi's pre-revenue status and ambitious goals. The company does not expect to generate tenant revenue until 2027, and its success hinges on the timely execution of its large-scale infrastructure projects. As the market continues to watch Fermi's progress closely, its performance may set the tone for future AI infrastructure investments in the public markets.
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