Trump-linked Fermi is having trouble signing its first data-center power tenant

By Steve Gelsi

The company, which is organized as a real-estate investment trust, plans to make up a three-week delay in signing a final contract with its first tenant, but investors remained worried

Fermi Inc.'s Project Matador - The President Donald J. Trump Advanced Energy and Intelligence Campus.

Fermi Inc.'s stock fell Tuesday after the company building one of the largest data-center power projects in the U.S. said it's running behind on negotiations with its first major tenant, but it's still on track to start generating power next year.

Since Fermi (FRMI) is set up as a real-estate investment trust that allocates income from tenants to shareholders, the delay may raise doubts about attracting other potential money-generating tenants.

Investors seemed to brush aside some positive developments announced in the company's first release of quarterly results, such as beating an internal estimate for the amount of gas-fired generation it expects to bring online in 2026.

The stock fell 11.1% in recent afternoon trading. It has had a volatile ride since going public on Oct. 1, with the initial public offering priced at $21 a share. The stock traded as high as $36.99 intraday on Oct. 2, but as low as $18.70 on Oct. 22, before recovering slightly.

Fermi Chief Executive Toby Neugebauer said Fermi's goal is to catch up in November and regain the roughly 21-day delay in signing its first tenant with "intense" face-to-face meetings. It expects the lease to be signed in the current fourth quarter.

"I wouldn't take anything as a sign of weakness with that delay," Neugebauer told Wall Street analysts. "I would just say, you know, these are very large corporations who have multiple different stakeholders who have to sign off on everything that's agreed to. And sometimes that takes longer than the commercial guys would prefer."

Fermi, which did not name the prospective tenant but described it as an "investment grade" corporation with power needs, has signed a letter of intent to lease a portion of the Project Matador campus for an initial term of 20 years, with four additional five-year renewal options. Project Matador encompasses the Donald J. Trump Generating Plant, which generates power for artificial-intelligence data centers.

This month, Fermi and the prospective tenant inked a $150 million advance to begin construction in what Neugebauer described as "clearly a sign of good faith in commitment" from the tenant.

Analyst Nicholas Amicucci of Evercore ISI - one of the main underwriters of the company's IPO - said the $150 million advance has been "seemingly underappreciated by the market," and that the company's overall timeline for producing power hasn't changed.

The advance "signals further commitment from its ... customer and should provide incremental confidence that the current letter of intent will transition to a firm contract" during the fourth quarter, Amicucci wrote in a research note. The revenue outlook for 2026 remains on track, he wrote, as the company appears set to book revenue prior to generation assets being up and running.

The company reported a net loss for the first nine months of 2025 of $332 million, including $173.8 million in charitable contributions, $111.6 million of losses related to convertible notes and other securities.

Fermi also said it expects to have about 2.2 gigawatts of gas-fired generation secured or under letter of intent in 2026, up from its initial target for 1 gigawatt from earlier this year.

Fermi said it was taking "no shortcuts" despite its ambitions, and highlighted the progress it has made on other fronts, such as securing water supply for the project and working to expand the area. It also submitted a permit to the federal government to build new nuclear power plants on the site.

It still expects to have the first portion of its campus running by the end of 2026 and then expand its capacity in stages to reach its full scale bythe 2030s in what the company describes as the "Manhattan Project of our generation" - a reference to the research behind the first nuclear weapon, which the U.S. used to end World War II.

The Donald J. Trump plant is an array of solar, natural gas and nuclear power generation, as well as storage and 2.6 million square feet of data-center capacity.

With 11 gigawatts of power, including 6 gigawatts of nuclear power and 5 gigawatts of gas-powered generation, Project Matador ranks as the "largest advanced energy and data campus in the world" to deliver next-generation AI at scale, Fermi said.

Besides the name of the plant, the company has ties to Trump through Rick Perry, a co-founder and board member. The latest filings show that Perry owned a little more than 16.5 million Fermi shares, which represented 2.5% of the shares outstanding.

-Steve Gelsi

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11-11-25 1339ET