Shares of Fermi Inc. (FRMI) surged 13.26% to $2.05, gaining $0.24 after retreating from intraday highs near $2.25. The rally followed Fermi's announcement of major hyperscaler agreements supporting its Project Matador development, which the company disclosed alongside its third-quarter 2026 financial results and plans to expand power capacity.

Fermi Secures $200 Million Hyperscaler Commitment for Project Matador

Fermi announced agreements with an unnamed investment-grade hyperscaler, the category of large cloud operators that anchor much of today's data center demand, to develop 600 megawatts of power capacity at Project Matador, the company's large-scale power infrastructure project. Development activities are expected to support the customer's planned deployment beginning in 2027, and the agreements provide early customer funding before both parties finalize a long-term lease.

Under the terms, the hyperscaler committed $200 million through a prepayment agreement supporting the proposed development. A separate $15 million agreement covers early construction activities and site preparation. These arrangements allow Fermi to advance infrastructure work while staying aligned with the customer's development schedule.

Fermi also plans to finalize a $90 million agreement covering structural steel and building materials. The agreement would give the customer access to materials that Fermi secured ahead of construction. The company expects these arrangements to accelerate development and reduce its need for additional equity funding.

Prepayment structures of this kind, in which customers fund a developer before a long-term lease is signed, have become a common feature of large-scale data center power deals, letting builders reduce reliance on capital markets during construction while customers secure capacity ahead of planned deployments.

Fermi Ends TensorWave Lease and Maintains Texas Tech Partnership

Fermi also announced the termination of its August 2026 data center lease agreement with TensorWave, which likewise ended the related AMD credit support agreement. The company continues to pursue other commercial opportunities across its planned infrastructure capacity.

Project Matador currently has 2.2 gigawatts of planned capacity available for potential customers. Fermi expects its existing customer pipeline to support future leasing opportunities across the development, though the company must secure definitive agreements before those opportunities can be converted into contracted revenue.

Fermi continues to work with the Texas Tech University System on Project Matador. Both organizations are addressing land lease conditions that must be resolved before vertical construction can begin. Texas Tech Chancellor Brandon Creighton reaffirmed the university system's support for the partnership.

Near-term milestones for the project include finalizing the long-term lease and the planned $90 million materials agreement with the hyperscaler, converting pipeline interest into definitive contracts, and resolving the land lease conditions that must clear before vertical construction starts.

Fermi Reports $141.6 Million Quarterly Loss as Development Spending Continues

Fermi reported $315.5 million in total cash and restricted cash at the end of September. The company recorded $133.4 million in property and equipment investments during the third quarter, lifting its net property and equipment balance to approximately $1.67 billion.

Outstanding net debt reached $958.4 million following additional borrowing during the quarter. Convertible senior notes and equipment financing facilities contributed $463 million in net borrowing increases, as the company continues to rely on financing arrangements to support its infrastructure development activities.

Fermi recorded a quarterly net loss of $141.6 million, equivalent to $0.22 per share. General and administrative expenses reached $142.2 million, including $65.8 million in noncash stock compensation. Stock-settled advisory fees totaled $21.5 million as Fermi continued developing its pre-revenue business.

The spending profile reflects the capital-intensive nature of utility-scale power and data center development, where heavy outlays and borrowing typically precede the first revenue-generating leases.