Fermi's 63% Slide Exposes the Financing Risk Behind Project Matador

Fermi's fall to a new low is best understood as a financing story, not a verdict on whether artificial-intelligence demand exists. The company is trying to build Project Matador, a power and data-center campus measured in gigawatts, while it remains pre-revenue and depends on outside capital to reach commercial operation.

The source article said Fermi shares touched $2.87 on Oct. 20 and were down more than 63% in 2026. It also reported that Cantor Fitzgerald cut its price target to $8 from $12 while keeping an Overweight rating. The target still implied substantial upside from the cited market price, but the company's own filing shows why the discount can remain wide.

Cash is only one part of the liquidity picture

At June 30, Fermi reported $62.5 million of cash and $29.2 million of restricted cash. The distinction matters because restricted cash is assigned to defined uses and cannot be treated as fully available corporate liquidity. Debt, net, stood at $520.1 million.

During the first half of 2026, Fermi spent $626.2 million on property, plant and equipment and used $56.0 million in operating cash. It financed much of that activity with $513.5 million of debt proceeds, while its six-month net loss reached $214.5 million. The company had not generated operating revenue by quarter-end.

Fermi raised another $431.3 million of 5% convertible notes in July, producing about $416.8 million of net proceeds. Approximately $34.5 million funded capped-call transactions designed to reduce potential dilution if the notes convert. The remaining proceeds improved liquidity, but the filing says existing resources were not sufficient to meet obligations for the following year before considering management's financing and asset-monetization plans.

Management concluded that those plans alleviate the substantial doubt about Fermi's ability to continue as a going concern. The company also warned that there is no guarantee the plans will succeed. Both statements matter: the filing is not predicting failure, but it is making financing execution central to the investment case.

A large lease still contains large conditions

Fermi's most important commercial agreement is a 15-year lease with TensorWave for a 222-megawatt data center at Project Matador. The company expects about $6.5 billion of contracted revenue over the initial term, excluding renewal and expansion options. TensorWave can expand the project to 650 megawatts through two additional buildings.

That headline revenue is not the same as current revenue. The lease required several closing conditions, including finalized operating documents, guaranties, board approvals and project-level financing sufficient to fund construction. The filing also set phased delivery targets from late 2027 into early 2028. Delays can trigger rent credits, and missing outside delivery dates can allow TensorWave to terminate affected space and recover prepaid amounts.

This is the operational bridge investors need to watch. Fermi must convert a conditional long-term contract into financed construction, delivered megawatts and rent-paying capacity. Each step depends on permits, equipment, contractors, power infrastructure and additional capital.

Why the low is not the thesis

CoreWeave and NuScale also appeared in the source article because debt costs and commercialization delays were pressuring speculative infrastructure stocks. Their presence explains the sector mood, but Fermi's balance sheet and contract milestones are company-specific.

A lower share price can make the upside implied by an analyst target look larger while simultaneously making equity financing more dilutive. The decisive evidence will be project-level financing, satisfaction of the TensorWave closing conditions and construction progress against the 2027 and 2028 delivery schedule. Until those milestones arrive, Project Matador's scale is an opportunity paired with an unusually large funding obligation.