Fermi shares rise 14.46% after credit support agreement with AMD
Key Facts
Fermi shares closed at $3.72, up 14.46% in the October 13, 2026 session, following the announcement of a credit support agreement with AMD, according to coverage by The Motley Fool. Fermi said the agreement supports the first phase of energy and artificial intelligence infrastructure development at Project Matador in Carson County, Texas. The company described the agreement in its statement as a step toward securing project financing. The stock's gains had begun before the market opened, with Investing.com reporting a 13.2% rise in premarket trading on the day of the announcement. The agreement comes as the company remained in the development stage and had yet to generate revenue when it announced its second-quarter results.
Fermi and AMD also signed a partnership agreement establishing a framework for potential future expansion to as much as 650 megawatts of gross power capacity, according to the company's original statement. Matthew Hein, AMD's executive responsible for strategy and business development, said the collaboration represents "an important step toward expanding the infrastructure capacity needed to deploy next-generation AI solutions," according to Investing.com. The Matador model aims to combine multiple power sources to serve advanced computing, according to Fermi's project presentation on its investor relations website. These sources include gas-fired and nuclear power generation, alongside supplies from the electricity grid. The model also includes solar power and battery energy storage.
The first phase of the lease with TensorWave includes a facility with gross power capacity of about 222 megawatts, according to Fermi's earnings disclosure filed with the U.S. Securities and Exchange Commission. The company set the initial contract term at 15 years in the statement announcing its signing. It estimated expected contracted revenue for the first phase at about $6.5 billion over that period. That figure represents future contract revenue over its initial years, rather than revenue the company has already generated. In its credit support statement, Fermi said AMD's commitments under the agreement and the closing of the TensorWave lease are subject to conditions being met.
Fermi's total cash and restricted cash stood at about $91.7 million at the end of June 2026, according to its second-quarter results filed with the U.S. Securities and Exchange Commission. At the end of the same period, the company's outstanding debt totaled $520.1 million. Fermi recorded a net loss of $25.8 million in the second quarter of the year. After the quarter ended, the company issued more than $431 million in convertible senior notes in July to bolster liquidity. In its results, it had reported investing more than $1.5 billion in developing the Matador site up to that point, before the credit support agreement with AMD.
In earlier coverage of the TensorWave lease, Citizens said the deal did not appear to include upfront customer financing, according to Investing.com. The firm framed its assessment by saying "the deal does not appear to include upfront customer financing often associated with larger hyperscale computing projects." Citizens linked that observation to the importance of the credit support structure and the company's financing. This comes as Fermi seeks to secure project financing through the announced agreement with AMD. The funds the company reported raising after the end of the second quarter came from the convertible note issuance to bolster its liquidity.
According to the schedule Fermi announced when it signed the TensorWave lease, phased delivery begins in the second half of 2027. The lease includes expansion rights for 2 additional data centers alongside the first-phase facility. That expansion remains contingent on the exercise of the rights set out in the lease. The broader partnership with AMD also concerns potential future expansion under the framework announced by the companies. Meeting the conditions for closing the TensorWave lease and for AMD's commitments remains part of the project's announced path before delivery begins under the original schedule.