$200M vs $6.5B.
$200M vs $6.5B. Fermi's new hyperscaler prepayment is about 3% of the projected revenue on the TensorWave lease it just ended, and I think the gap matters less than whether the 600 MW deal turns into a signed long-term lease.
- On Nov. 12, Fermi and TensorWave mutually terminated their lease, along with the related AMD credit-support agreement. The $6.5B was projected revenue over an initial 15-year term, so it was never cash in hand.
- The replacement is a $200M prepayment plus a $15M early-construction agreement with an undisclosed investment-grade hyperscaler. It covers an initial 600 MW at Project Matador starting in 2027, versus 222 MW for TensorWave's first phase.
- The definitive long-term lease is still pending. Until it's signed, shareholders are holding an announced framework, and the customer has no name yet.
- $FRMI closed up 17.5% at $1.81 and was quoted at $2.0085 pre-market on Nov. 12, up 10.97% from that close, as the TensorWave overhang came off alongside Q3 results.
My read: the market is pricing relief from the TensorWave uncertainty, and that part is fair. The rally only holds up if the 600 MW lease gets signed, and I'd want that paper before chasing a stock that's up this much in a session.
Sources:
https://www.barrons.com/articles/fermi-earnings-stock-price-ai-a77dfba4
Not financial advice. For informational and educational purposes only.
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