By Benoît Morenne
Shares of geothermal developer Fervo Energy soared in their public-market debut, a sign of investor appetite for energy companies as the U.S. faces record amounts of new power demand.
Fervo's stock opened at $36 a share, up 33% from its $27 initial public offering price. It trades on the Nasdaq under the ticker FRVO.
The details
Houston-based Fervo uses technology pioneered by oil-and-gas drillers to frack rocks, create geothermal reservoirs and crank out electricity. The company is spending more than $2 billion in Utah to build what it expects to be the world's largest enhanced geothermal project, expected to come online later this year. It has said it can help sate power-hungry data centers, electric vehicles and growing industries.
Fervo boosted the size of its offering and priced its shares above the expected range of $21 to $24 a share. The deal raised $1.89 billion and valued the company at about $7.7 billion.
Tim Latimer, the company's chief executive, said in an interview that he saw the IPO as a decisive moment for the geothermal industry, which historically has struggled to attract as much attention from investors as other renewables.
"If we've shown that we can make this much progress with as little capital as the sector has attracted to date, you know, what actually happens if we're capitalized appropriately, and how much faster can we move?"
The context
Fervo, founded in 2017, has drawn backers including Bill Gates's Breakthrough Energy Ventures, billionaire and former energy trader John Arnold, and Google. It has quickly emerged as a champion of so-called enhanced geothermal.
Finding pockets of underground heat is relatively easy in places with a lot of geothermal activity, including parts of the U.S., Indonesia and New Zealand. When the heat is deeper in the earth, it is more difficult and more expensive to find. Those constraints have kept the sector's share of U.S. electricity generation at less than 1%.
Fervo says its technology allows it to drill for heat in many more locales since it essentially creates its own heat reservoirs; it says it sits on about 600,000 acres of geothermal leases across the Western U.S. Its current costs are about $7,000 per kilowatt of capacity, but it projects it can bring them down to $3,000. That would make building a geothermal power plant only slightly more expensive than a gas-fired facility, based on current costs.
Unlike gas-fired power generation, which emits carbon dioxide emissions, geothermal heat is carbon-free. That's the kind of steady, round-the-clock, clean supply that tech companies covet for their power-hungry data centers.
The company is still in the process of building its first large-scale commercial power plant and doesn't generate meaningful revenue. It reported a net loss of $57.8 million for last year and $41.1 million in 2024, according to its offering prospectus.
The company says it intends to generate the majority of its revenue by selling electricity to hyperscalers, utilities and other energy companies. Its current contracts represent a revenue backlog of about $7.2 billion over the contracts' 15-year average terms, it said in the prospectus. Beyond the Utah project, it has pinpointed 10 sites from which it says could potentially produce as much as 40 gigawatts of electricity. That's about as much power as the state of Georgia's fleet can deliver in the summer.
Geothermal is one of the few renewables that enjoys the support of both Democrats and Republicans, and it is poised to expand under the Trump administration. The House recently passed legislation that seeks to remove federal barriers to geothermal projects. The bill is now headed to the Senate.
Still, challenges remain for Fervo. It is pioneering a new, largely untested method of power generation. One potential bottleneck could be a lack of high-voltage transmission lines that carry electricity from power plants over long distances.
"I think Fervo has a great growth story ahead of us, but I think that it could be even better if there continues to be policy advancements on these key topics like transmission and permitting," Latimer said.
Write to Benoît Morenne at benoit.morenne@wsj.com
(END) Dow Jones Newswires
May 13, 2026 13:28 ET (17:28 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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