Why Fermi Stock Flopped Today
Key Points
The energy and AI infrastructure developer posted third-quarter results, such as they are.
The pre-revenue business booked a loss of almost $347 million.
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Fermi (NASDAQ: FRMI), a developer of next-generation power infrastructure, didn't have a great deal of energy on the stock market Tuesday. Investors weren't impressed with the company's latest set of quarterly figures and made their displeasure known by driving the shares down by over 13% in value across that trading session.
Vaulting ambitions
With ambitions to build what it describes as "the world's largest private [electricity] grid in the Texas Panhandle" to support facilities such as artificial intelligence (AI)-capable data centers, Fermi has certainly set itself a daunting task.
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Image source: Getty Images.
But the pre-revenue company didn't wow the market with its Q3 results, published after market close on Monday. These revealed that Fermi's net loss according to generally accepted accounting principles (GAAP) for the period was a steep $346.8 million, or $0.84 per share.
In its shareholder letter detailing the quarter's events, Fermi emphasized what it considered to be the milestones during the period. One of these was the start of its lease for the ground on which it aims to build Project Matador, a planned sprawling high-tech campus that would host both energy and AI infrastructure.
The company also touted a series of agreements it concluded for the development of four nuclear reactors at the site in addition to natural gas pipeline infrastructure and water supply.
Show me the money
Stock investors can be an impatient bunch, however, and in Fermi's case they might be getting impatient to see more meaningful progress on Matador. The company's ambitions are admirably high for the project, but since we're quite some distance from potential realization, this remains a very speculative stock at best.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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