Why New AI IPO Stock Fermi Is Rebounding After Plunging Over 40% in 2 Days
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By Neha Chamaria – Dec 16, 2025 at 3:04PM ESTKey PointsFermi stock has plunged more than 50% since its IPO in October 2025.Fermi has just lost its first potential anchor customer. Fermi, however, remains confident about meeting its first sales goals. These 10 Stocks Could Mint the Next Wave of Millionaires ›NASDAQ: FRMIFermiMarket Cap$5.3BToday's Changeangle-down(13.85%) $1.19Current Price$9.78Price as of December 16, 2025 at 3:25 PM ETFermi is building a massive power grid to support AI data centers, but it just faced a major setback.Fermi (FRMI +13.85%) is perhaps among the few artificial intelligence (AI) stocks you'd not have heard about until its recent wild price swings. The stock soared 17.2% at its highest point in trading on Tuesday, but that's after a 44% plunge over the previous two trading days. Is this a dead cat bounce or an opportunity to buy Fermi before it's too late? Image source: Getty Images. What does Fermi do, and what's going on with its stock? Fermi is building what it claims will be the world's largest next-generation private power grid with an 11-gigawatt capacity.
Its Project Matador campus in Texas will integrate a mix of natural gas, nuclear energy, solar power, and battery storage to deliver on-site power to hyperscalers, supporting the voracious power needs of AI data centers. Here's what happened last week: Fermi revealed that its first prospective tenant to lease a portion of the Project Matador campus for 20 years has terminated its advance construction agreement under which it had agreed to pay up to $150 million to Fermi to fund construction costs. ExpandNASDAQ: FRMIFermiToday's Change(13.85%) $1.19Current Price$9.78Key Data PointsMarket Cap$5.3BDay's Range$8.70 - $10.0752wk Range$8.30 - $36.99Volume8MAvg Vol6.9M Fermi stock plunged after the development. After all, the first potential anchor customer walking away may seem like a red flag for a pre-revenue start-up. The stock, however, rebounded on Tuesday as investors believe Fermi could still succeed. Is Fermi a good stock to buy? Fermi said it was still negotiating a lease agreement with the said party that terminated the deal. Moreover, despite losing out on the crucial $150 million in funding, Fermi believes it should still be able to build the Project Matador campus and meet its planned power delivery targets. In November, Fermi said it expects to deliver the first power from the campus in 2026 . Fermi has also signed up some customers, including a subsidiary of Xcel Energy (XEL 2.06%), for a supply of up to 200 megawatts of electrical capacity from the campus.Advertisement Fermi, however, has yet to generate its first sales and, therefore, remains a highly speculative bet and best watched from the sidelines for now. Also, there's another reason why Fermi stock is so volatile – it became public only in October 2025, and the prices of newly listed stocks can sway faster than investor sentiment. About the AuthorNeha Chamaria is a contributing Motley Fool stock market analyst covering energy, industrials, utilities, and materials sectors, with a focus on dividend stocks. Prior to The Motley Fool, Neha worked on portfolio valuations for hedge funds at HSBC and authored articles as a journalist. She holds a master’s degree in finance from ICFAI and an MBA from Symbiosis University, along with certifications from the National Stock Exchange of India. Neha was honored with an all-India gold medal for her M.S. in Finance and was the first woman in her family to pursue a professional career.TMFNehamsX@nehamschamaria