TLDR
- Fervo Energy (FRVO) stock rose 7.3% to $18.41 on Friday, hitting an intraday high of $18.58
- Alphabet/Google signed a 396-megawatt power purchase agreement with Fervo, the largest enhanced geothermal deal on record
- The deal involves Fervo’s Cape Station plant in Utah, with the GeoCluster system expected online in 2028
- Analysts hold a “Moderate Buy” consensus with an average price target of $44, roughly 139% above current price
- Several institutional investors initiated new positions in Q2, including Resolute Advisors ($5.3M) and Readystate Asset Management ($4.4M)
Fervo Energy (FRVO) stock closed at $18.41 on Friday, up 7.3% on the day, after a landmark power deal with Alphabet’s Google sent the stock surging 25% earlier in the week.
The agreement, announced September 1, covers 396 megawatts of carbon-free electricity from Fervo’s under-construction Cape Station plant in Utah. It is the largest power purchase agreement for enhanced geothermal systems ever recorded.
Alphabet also holds an option to expand the deal by roughly 600 megawatts, potentially bringing total capacity to 1 gigawatt by June 2030.
Fervo IPO’d in May at $27 per share, opened near $35 after the offering was upsized due to strong demand, and raised $2.2 billion. The stock quickly topped $40 before falling steadily, bottoming near $15 before the Google deal landed.
The Cape Station plant’s standard geothermal section is expected to be operational by the end of 2025. The enhanced geothermal systems (EGS) GeoCluster component tied to the Google deal is targeted for 2028.
“This agreement reinforces that EGS is ready to power the next generation of computing infrastructure,” said Fervo CEO Tim Latimer.
Analyst Targets Well Above Current Price
Wall Street is largely bullish on FRVO. Morgan Stanley upgraded the stock to “overweight” this week. JPMorgan initiated coverage with an “overweight” rating and a $47 price target. Roth Capital also started coverage with a “buy” rating and a $45 target.
The consensus across 16 analysts sits at “Moderate Buy” with an average price target of $44. Eleven analysts carry “Buy” ratings, two rate it “Hold,” and one has a “Sell.”
That $44 target implies more than 100% upside from Friday’s close. The stock’s 50-day moving average is $22.58, still well above current levels.
Institutional Money Moving In
Several institutional investors opened new positions in Q2, Fervo’s first full quarter as a public company. Resolute Advisors took the largest new stake at roughly $5.3 million. Readystate Asset Management followed at $4.4 million, with Ranger Investment Management adding $1.5 million.
Despite the positive momentum, Fervo’s financials remain early-stage. The company reported a loss of $0.38 per share in Q2, wider than the $0.09 consensus estimate. Revenue came in at just $113,000 for the quarter.
Analysts expect a full-year loss of $0.42 per share for the current fiscal year.
Fervo currently has a development pipeline exceeding 50 gigawatts and a backlog of more than $7 billion. The company is targeting 1.1 gigawatts of operational capacity by 2030 and recently raised its power forecast by 100 megawatts.
Friday’s trading volume came in at roughly 1.13 million, down 73% from the average daily volume of 4.1 million.
