Fermi shares drop 38% as partner exits data center project

Fermi’s stock crashed 37.9% in July after its high-flying private-power play for AI data centers hit a wall. The company, which went public last year, has watched its share price tumble more than 80% from its peak as the AI trade cooled and investors questioned its cash-burning build-out in Texas. Data from S&P Global Market Intelligence shows no other Nasdaq-listed stock suffered a bigger single-month drop during the period.

The selloff reflects two problems: timing and execution. Fermi bet that Texas would keep attracting data-center demand and proposed building a private grid to sell power directly to operators. That story worked while AI stocks surged, but momentum stalled in July and power-focused names like Fermi went with it. A year ago the company inked a big partnership for its first Texas campus; the partner walked away, forcing Fermi to raise fresh capital and delay its opening until 2027, missing the AI build-out window.

Quarterly figures tell the cash-drain story. In the first three months of 2026 Fermi spent $441 million on facilities and equipment yet generated no revenue. In late June it issued convertible notes, a move that usually pressures shares as investors worry about future dilution. Analysts note that every dollar invested today adds to the pile of cash needed to bridge the company to profitability, which remains at least a year away. The market now values Fermi at $3.9 billion—down from its peak—but still expects more funding rounds and further shareholder dilution before any power contracts start flowing.

Unless Fermi can lock in long-term deals with data-center giants, the path forward looks like a cash-burning marathon with no finish line in sight. The company still aims to deliver up to 17 gigawatts of power in Texas, a scale that could justify its valuation if execution improves. For now, though, the stock’s slide shows investors are no longer willing to bet on promises—only on power plants that actually produce revenue.