Fervo Energy (FRVO) stock closed at $18.41 on Friday, up 7.3% on the day and touching an intraday high of $18.58, after a landmark power agreement with Alphabet's Google sent the shares 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 (EGS) 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.

The deal reflects growing demand from hyperscale tech companies for round-the-clock carbon-free power to run energy-intensive data centers, and EGS — which uses drilling techniques borrowed from shale oil and gas to unlock geothermal energy beyond naturally occurring hot springs — has drawn interest as a source of firm, always-on clean electricity that wind and solar cannot provide on their own. Google had previously partnered with Fervo on a smaller Nevada project, one of the first commercial EGS arrangements in the United States.

Fervo went public in May, pricing its IPO at $27 per share. The offering was upsized due to strong demand, opened near $35, and raised $2.2 billion. The stock quickly topped $40 before falling steadily, bottoming near $15 ahead of the Google deal.

The Cape Station plant's standard geothermal section is expected to be operational by the end of 2025, while the 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, and 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 — roughly 139% above the current price. Eleven analysts carry "Buy" ratings, two rate it "Hold," and one has a "Sell." 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, followed by Readystate Asset Management at $4.4 million and Ranger Investment Management at $1.5 million.

Despite the positive momentum, Fervo's financials remain early-stage. The company reported a Q2 loss of $0.38 per share, wider than the $0.09 consensus estimate, on revenue of 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.

Key milestones ahead include the startup of Cape Station's standard geothermal section by the end of 2025 and progress toward the 2028 EGS GeoCluster target tied to the Google contract.

Friday's trading volume came in at roughly 1.13 million shares, down 73% from the average daily volume of 4.1 million.