TLDR
- Fermi stock jumped 16% to $6.82 in premarket trading after announcing its first data center lease
- The 15-year deal with AI cloud provider TensorWave is worth approximately $6.5 billion in total contracted revenue
- The lease covers 222MW of capacity at Fermi’s Project Matador campus in Amarillo, Texas
- Expansion rights could bring the total partnership to over 650MW across additional data centers
- Mizuho reiterated its Outperform rating and $11 price target following the announcement
Fermi (FRMI) stock surged 16% to $6.82 in premarket trading on Tuesday after the data-center developer finally landed its first tenant for its Project Matador campus in Amarillo, Texas.
The deal is a 15-year lease with AI cloud provider TensorWave, worth approximately $6.5 billion in total contracted revenue. That number had Wall Street paying attention fast.
Under the agreement, Fermi will develop, construct, and deliver data centers to TensorWave in a turnkey arrangement. TensorWave will then take occupancy in phases starting in the second half of 2027.
$FRMI Fermi Signs First Binding Project Matador Lease With TensorWave, Securing ~$6.5B in Contracted Revenue
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• Fermi signed a 15-year turnkey data center lease with TensorWave covering 222 MW of total facility power, with phased delivery beginning in H2 2027.
• The first…— alldaystocks | 24/7 Market News (@allday_stocks) August 10, 2026
The initial phase covers 222MW of total power capacity. The lease also includes expansion rights for two additional data centers.
If those expansion rights are exercised, the total partnership could reach more than 650MW. That would be a meaningful jump from the initial scope of the deal.
Fermi Chairman Marius Haas called it a “tremendous vote of confidence” in the company. He said landing this lease was the most important objective the company had set out to achieve since May.
Fermi’s Long Wait for a Tenant
Getting here wasn’t smooth. Fermi had been struggling to find a lease partner for the 7,570-acre Amarillo site for some time.
That difficulty created friction internally. Former CEO Toby Neugebauer was dismissed in April, with some analysts linking his exit to the slow progress on securing a tenant.
Before Tuesday’s announcement, Fermi stock was down 27% year-to-date. The 16% premarket pop puts a dent in that loss, but the stock still has ground to recover.
Fermi co-founder Rick Perry, the former U.S. energy secretary and former governor of Texas, had set the ambition of building the world’s largest data center at the site. This lease is the first real step toward that.
Mizuho Reiterates Outperform
Mizuho reiterated its Outperform rating on Fermi following the announcement, keeping its price target at $11.
The stock currently trades at $5.88 according to Investing.com, which notes InvestingPro analysis suggests the company is undervalued relative to its Fair Value.
Mizuho had previously lowered its price target from $27 to $11 due to delays in tenant signings. The analyst described this lease signing as a long-awaited catalyst.
Mizuho had earlier outlined expectations for 500MW operational in 2027 and another 500MW in 2028.
On the financial side, Fermi recently closed an offering of $431.25 million in convertible senior notes at a 5.00% interest rate, maturing in 2031.
The company also priced $375 million in convertible senior notes earlier in 2026. A separate $350 million convertible notes offering had previously caused a dip in the stock.
InvestingPro flagged that Fermi is burning through cash quickly, though the $6.5 billion contract could change that picture going forward.
Mizuho maintained its Outperform rating on the stock following direct discussions with management about the terms of the agreement.
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