A $6.5 Billion Reason to Buy FRMI Stock Now

Fermi (FRMI) stock just went parabolic after the company announced a binding customer lease for Project Matador, its massive artificial intelligence (AI) data-center campus in Texas. Shares of the energy and infrastructure company jumped roughly 21% in trading on Aug. 11 after Fermi revealed a 15-year agreement with AI cloud provider TensorWave worth approximately $6.5 billion in contracted revenue. 

This deal is important because Fermi has been trying to turn its ambitious AI infrastructure vision into a real business. It now has its first committed tenant. But investors should remember that Fermi remains pre-revenue, unprofitable, and heavily dependent on successfully completing Project Matador. 

Is this the beginning of a major turnaround for FRMI stock? Or is the rally getting ahead of itself?

Fermi Stock Gets a Major Catalyst

Fermi shares have been extremely volatile, with FRMI stock trading between $4.47 and $36.99 over the past year, showing just how quickly sentiment can change. Before this week's rally, shares were down substantially in 2026, although the stock is now down just 6% year-to-date (YTD).

The biggest problem is that Fermi has been building an enormous AI infrastructure project without meaningful revenue to show investors. But that equation just changed. The TensorWave agreement covers the first 222-megawatt phase of Project Matador, with deliveries expected to begin in the second half of 2027. The companies also reportedly intend to expand the relationship to more than 650 MW across three phases. 

That gives investors something Fermi previously lacked: a binding customer agreement and contracted revenue.

How the TensorWave Deal Changes the Fermi Story

The significance of this deal goes beyond the $6.5 billion headline number.

Fermi is developing Project Matador on a 8,400-acre site in Texas, with the broader campus designed around large-scale power and AI computing infrastructure. Securing TensorWave suggests that customers are willing to commit to the project rather than simply discuss potential capacity. That is a meaningful validation of Fermi's strategy.

The company still has to build the facilities, secure financing, and deliver power. The $6.5 billion is also contracted revenue over 15 years, not $6.5 billion of cash arriving tomorrow. Still, having a customer locked in could make it easier for Fermi to attract additional tenants and financing.

In other words, the TensorWave lease could be the first domino rather than the finish line.

Fermi Is Still Difficult to Value

The market is essentially pricing the probability that Project Matador becomes a large, profitable AI infrastructure platform. That creates enormous upside if Fermi executes, but it also creates substantial downside risk if construction, financing, or tenant expansion runs into problems.

Fermi has also been spending aggressively to build the project. It recently agreed to purchase three gas turbine units from Siemens (SMEGF) and priced a $375 million convertible note offering in July. Those investments show management is moving beyond simply announcing plans and toward building the infrastructure needed to support future customers.

Earnings Show Why the TensorWave Agreement Matters

Fermi's latest quarterly results were weak, which makes the TensorWave agreement even more important.

In the first quarter of 2026, Fermi reported a net loss of $188.7 million, or $0.30 per share, missing the consensus EPS estimate of a $0.03 loss. Revenue also missed expectations, coming in at $0 for the period. So, no, Fermi did not beat estimates on either earnings or revenue in its latest reported quarter.

The next test comes on Aug. 13, when analysts expect a loss of roughly $0.06 per share and revenue of about $3 million. 

That potential improvement would still leave Fermi far from profitability. But investors will likely focus more heavily on Project Matador progress, financing, and the company's ability to turn today's lease into additional customers.

Wall Street Sees Upside for FRMI Stock

Mizuho maintained an “Outperform” rating on FRMI stock and offered an $11 price target after the TensorWave announcement, calling the lease a long-awaited catalyst. 

Overall, analysts remain bullish, although their targets vary widely. FRMI stock carries a consensus “Strong Buy” rating on Wall Street. The average price target of $18.90 represents potential upside of 148% from current levels. The highest price target is $35 while the lowest target is $6 per share.

The wide range of these price targets tells investors exactly what kind of stock FRMI is; the upside could be substantial if Fermi successfully builds Project Matador and signs more tenants, but the recent surge in shares does not eliminate execution risk.

For investors considering Fermi, the TensorWave agreement makes the story much more credible than it was yesterday. But with revenue still near zero and the biggest financial payoff years away, FRMI stock remains a high-risk bet on the future of AI infrastructure.