Fermi’s Texas Power Gamble Faces Investor Exodus and Delays

The ambitious vision of Fermi to build a private power grid for AI data centers in Texas is hitting turbulence on two fronts. While the company secures fresh capital and key approvals, a stark loss of confidence from major shareholders and a revised project timeline are testing investor patience.

Significant insider selling is casting a shadow over the stock. Recent SEC filings reveal that Caddis Holdings, a major shareholder, sold a substantial block of eleven million shares in late March. This included nine million shares on March 30 at an average price of $5.02, followed by another two million the next day. Such large-scale divestment by insiders, including co-founder Griffin Perry, has contributed to a sharp decline in the share price. The stock hit a new annual low of €3.88 on Thursday, marking a nearly 45% loss since the start of the year. A slight recovery to €4.16 on Friday did little to alleviate the underlying pressure.

Operationally, the centerpiece of Fermi’s strategy remains “Project Matador” in the Texas Panhandle. The company recently achieved a critical milestone by securing approval for a 6-gigawatt gas-fired power plant. CEO Griffin Perry noted this development has significantly improved the quality of discussions with potential large-scale tenants. The total planned capacity for the private energy network now stands at 17 gigawatts.

However, the project’s schedule has been pushed back. The initial plan to bring approximately 1.1 gigawatts online by the end of 2026 has been revised. Management now targets around 2.0 gigawatts of capacity from gas and grid power by the end of 2027, contingent on construction progress, permits, and crucially, the signing of lease agreements.

Should investors sell immediately? Or is it worth buying Fermi?

To fund this costly infrastructure, Fermi continues to raise capital. In early April, the company secured an additional €156.25 million in financing from Yorkville Advisors via an unsecured bond due in September 2027. This latest commitment pushes the total pledged capital for the project past the €1 billion mark, with other contributors including €165 million from CSG Investments.

The financial backdrop remains challenging. For the 2025 fiscal year, Fermi reported a net loss of $486 million. The company emphasizes that over 90% of this figure was attributable to non-cash items. With cash reserves of $409 million and a total balance sheet of $1.4 billion, Fermi maintains a financial cushion as it works toward generating its first meaningful revenue, which is anticipated in 2026.

Wall Street analysts present a divided view. Cantor Fitzgerald initiated coverage on Thursday with a “Buy” rating and a price target of €8.00. In contrast, UBS dramatically slashed its price target from €30.00 to €8.00. While experts acknowledge the project’s potential, the absence of firm contracts with major data center operators is universally cited as the central investment risk.

The coming weeks are pivotal. Fermi is expected to release its first-quarter 2026 results in late April. Investors will scrutinize the report for concrete progress in negotiations with potential anchor tenants for Matador. The company’s ability to bridge the gap between expensive infrastructure development and tangible income will be key to restoring market confidence, especially after its IPO in October 2025 at $21 per share.