• Fermi Inc. has reported second-quarter 2026 results showing a net loss of US$25.81 million and a much larger six-month loss of US$214.50 million, while also signing its first major 15-year lease with TensorWave and securing a framework agreement for a 2.6 GW Hillcore Power Center at Project Matador in Texas.
• Together, the TensorWave lease and Hillcore Build-Own-Operate-Transfer power deal mark a shift from pure development toward contracted, large-scale AI campus execution, while leaving project financing, construction, and operating risks for the new power complex primarily with Hillcore.
• We’ll now examine how Fermi’s Hillcore power partnership, which adds gigawatts of behind-the-meter capacity without upfront capital, reshapes its investment narrative.

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Fermi Investment Narrative Recap

To own Fermi, you have to believe its massive, pre revenue AI power campus can be filled with long duration tenant leases before the cash burn bites too hard. The TensorWave contract directly addresses the “no tenants” risk, while the Hillcore Power Center framework speaks to capital and construction risk. Near term, the key catalyst is converting this framework into binding power agreements. The biggest risk remains timing and scale of additional tenant commitments versus continuing large net losses.

Among the recent updates, the Hillcore Build Own Operate Transfer framework is the most relevant, because it adds about 2.6 GW of behind the meter capacity without upfront capital. That structure ties power purchases to signed leases, which could help align future costs with revenue once more tenants are on board. It also keeps construction, operating, and performance risk on Hillcore, which matters as Fermi’s six month net loss reached US$214.50 million.

Yet against this progress, investors should still weigh how a prolonged gap between new leases and rising cash burn could...

Fermi's narrative projects $3.4 billion revenue and $2.2 billion earnings by 2029. This requires earnings to increase by about $2.9 billion from -$718.4 million today.

Uncover how Fermi's forecasts yield a $17.00 fair value, a 158% upside to its current price.

Exploring Other Perspectives

Some of the most optimistic analysts were modelling about US$5.3 billion of revenue and US$3.2 billion of earnings by 2029, which is far more aggressive than consensus. Those targets leaned heavily on rapid monetization of Fermi’s already built and permitted infrastructure, a catalyst that looks more plausible after the Hillcore deal but still depends on how quickly additional definitive leases actually arrive.

Explore 8 other fair value estimates on Fermi - why the stock might be a potential multi-bagger!

The Verdict Is Yours

Don't just follow the ticker - dig into the data and build a conviction that's truly your own.

• A great starting point for your Fermi research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Fermi research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Fermi's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.