Why Fermi Stock Collapsed 41% Last Month

By Brett Schafer – Apr 3, 2026 at 9:48AM ESTKey PointsFermi went public last year and aims to be a REIT that provides power to AI data centers.The company generates zero revenue right now and has lost one of its initial tenants for the project. The stock's shares are down massively, but it still looks like a poor investment from here. Shares of Fermi (FRMI 0.28%) collapsed 41% in March, according to data from S&P Global Market Intelligence. The recently public real estate investment trust (REIT) is trying to build a private power grid for the artificial intelligence (AI) boom, but is struggling to find tenants. Going public less than a year ago, Fermi's stock is now down by more than 80% from its highs. The company still has grand ambitions to greatly increase electric power capacity in the United States. Here's why it was falling yet again last month, and whether it is a buy right now. ExpandNASDAQ: FRMIFermiToday's Change(-0.28%) $-0.01Current Price$5.36Key Data PointsMarket Cap$3.4BDay's Range$5.03 - $5.6752wk Range$4.63 - $36.99Volume9.2MAvg Vol8.3M Building power capacity, searching for customers One of the bottleknecks of the AI revolution is building enough electric power for the data centers to train and run AI models. Fermi saw this opportunity and incorporated as a REIT in early 2025. Its goal is to build a massive power-generation facility that bypasses the electric grid and directly delivers power to data center customers. The facility will be in remote Texas and is named Project Matador. Management raised $750 million in an initial public offering (IPO) to help with the build process, but it is not delivering any power today. With a goal of growing to 17 gigawatts of capacity -- a massive amount of power -- management is aiming to use natural gas and renewable sources, and to develop its own nuclear power reactors. The problem is the lack of customer demand and skepticism around project funding. An initial tenant for Project Matador pulled out of a $150 million upfront commitment, likely because Fermi is still far from actually generating electric power. These data center customers need power right now. On top of this, Fermi is heading into the lock-up expiration from its IPO, which will unlock a bunch of insider shares that can be sold, which usually drives down stock prices. Image source: Getty Images. Time to buy the dip? The potential for Fermi is massive. If it can build its power facility, it could generate billions of dollars in annual revenue. What has investors concerned is the upfront cost this will entail, and why Fermi has failed to win contracts despite the current demand from AI infrastructure providers. It burned around $600 million in free cash flow last year, its first year in operation. With zero revenue today, significant capital spending expected in the future, and no near-term path to profitability, smart investors will avoid buying the dip in Fermi stock. Read NextMar 30, 2026 •By Howard SmithStock Market Today, March 30: Fermi Shares Plunge After Wider Loss and No Tenant for Flagship AI ProjectApr 3, 2026 •By Brett SchaferWhy Planet Labs Stock Climbed 15.8% In MarchApr 3, 2026 •By Daniel Miller1 Reason to Buy Rivian Like There's No Tomorrow. Hint: It's Not the R2Apr 3, 2026 •By Danny Vena, CPAWhy AeroVironment Stock Crashed 27% in MarchApr 3, 2026 •By Todd ShriberWhere Will Lockheed Martin Stock Be in 5 Years?Apr 3, 2026 •By Stefon WaltersThe Smartest S&P 500 ETF to Buy With $1,000 in April 2026About the AuthorBrett Schafer is a contributing Motley Fool stock market analyst covering consumer goods, financials, technology, and industrials. Brett is a self-taught investor and has hosted the Chit Chat Stocks podcast since 2018. He previously worked as a lab engineer for science laboratories. He holds a bachelor’s degree in mechanical engineering with minors in finance and mathematics from Washington State University. His lab work on Major League Baseball’s juiced ball problem was featured in The Wall Street Journal and other national outlets.TMFBrettSchaferX@CCM_BrettStocks MentionedFermiNASDAQ: FRMI$5.36(-0.28%)-$0.02*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.