TLDR
- Fervo Energy (FRVO) opened at $36 on Nasdaq, up 36% from its $27 IPO price, reaching a valuation of $10.21 billion.
- The company raised $1.89 billion in its IPO — the largest energy IPO since 2013.
- Fervo is backed by Bill Gates’ Breakthrough Energy Ventures and Devon Energy.
- Despite $138,000 in revenue last year, Fervo has $7.2 billion in potential revenue backlog from signed contracts.
- The company aims to cut geothermal project costs from $7,000 to $3,000 per kilowatt to compete with natural gas.
Fervo Energy made a strong Wall Street entrance on Wednesday, with its stock opening at $36 on Nasdaq — 33% above its $27 IPO price. By early trading, it had climbed to $36.63, a gain of roughly 36%.
Fervo Energy shares opened 33% above their IPO price after the geothermal energy developer raised $1.89 billion in an upsized US initial public offering. https://t.co/8qwP07CMLD
— Bloomberg (@business) May 13, 2026
The Houston-based geothermal developer raised $1.89 billion in its IPO, selling 70 million shares at $27 each. That came in above its initial marketed range and above the $1.3 billion it originally targeted.
Renaissance Capital called it the largest energy or utility IPO since 2013. The offering valued Fervo at around $8 billion at pricing, which rose to $10.21 billion once trading began.
Fervo is backed by Bill Gates’ Breakthrough Energy Ventures and Devon Energy. Gates has been vocal about geothermal as a clean, around-the-clock power source — unlike solar and wind, which depend on weather.
The company was founded in 2017 and has developed what it calls advanced geothermal systems. It drills deep into the earth, using techniques borrowed from the shale industry to unlock heat from rock that traditional geothermal plants couldn’t reach.
That’s the pitch, anyway. The financials are early-stage. Fervo reported just $138,000 in revenue last year and posted a net loss of $57.8 million.
What it does have is a pipeline. The company says it holds signed contracts representing roughly $7.2 billion in potential revenue backlog.
From Small Project to Large-Scale Ambitions
Right now, Fervo operates a 3.5-megawatt project — enough to power a few thousand homes. It’s also building a much larger project in Utah that it expects to generate more than 100 times that capacity.
CFO David Ulrey told Barron’s that investor interest ahead of the IPO was broad. Traditional energy investors were “looking for the future,” while generalist investors were “really excited about just the trend of AI and hyperscale, and power.”
Alphabet is among Fervo’s partners. Data center operators have been looking for stable, carbon-free power sources as AI workloads push electricity demand higher. Fervo is positioning itself as an answer to that need.
The Cost Problem
The Utah project is expected to cost around $7,000 per kilowatt to build — more than twice the cost of a natural gas plant. That’s the central challenge.
Fervo’s goal is to get that number down to $3,000 per kilowatt. At that price point, it could be more competitive than gas, since geothermal doesn’t require fuel once the plant is built.
The company says its edge is the application of shale drilling technology to geothermal. Historically, geothermal plants could only operate in a handful of locations with the right underground conditions. Fervo says it can make far more locations viable.
Surging power demand from electric vehicles and domestic manufacturing is also adding pressure to the U.S. grid, which Fervo cited as another driver of long-term demand for its technology.
Trading on Nasdaq under the ticker FRVO, the stock was up more than 41% as of midday Wednesday.
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