Fermi Secures $6.5 Billion TensorWave Lease Agreement for Texas AI Data Center

Fermi Secures First Major Customer with $6.5 Billion Deal

Fermi Inc. has executed its first binding customer lease agreement at its Project Matador campus in Carson County, Texas, with TensorWave TEX1, LLC, a subsidiary of AI cloud provider TensorWave2

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. The lease agreement covers a facility supported by 222 MW of total facility power and is expected to generate approximately $6.5 billion in total contracted revenue over the initial 15-year term for the first phase, excluding any renewal terms3

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. The announcement sent Fermi's stock surging more than 35% in after-hours trading, reflecting investor confidence in the company's ability to deliver on its ambitious AI infrastructure plans5

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. During Tuesday's premarket session, the stock continued its upward trajectory, trading higher by more than 19%1

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Project Matador Positions Fermi to Address Power Constraints in AI Infrastructure

The 222 MW facility at Project Matador is being designed to support tens of thousands of next-generation AMD Instinct GPUs for large-scale AI training and inference2

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. The lease agreement includes expansion rights for two additional data centers that, when exercised, would bring the partnership to a total of more than 650 MW3

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. Construction at Project Matador is well underway, with approximately 6 gigawatts of the planned 17 GW already permitted and more than $1.5 billion invested in the buildout to date2

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. Fermi is targeting first power delivery in 2026, positioning the company to bring AI data center capacity online while many competing projects remain stalled by funding challenges or permitting issues1

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Marius Haas, Chairman of the Board of Directors of Fermi Inc., stated that "a lease of this size and this term is a tremendous vote of confidence in Fermi" and emphasized that the company has "fulfilled the most important objective we shared with the market in May"3

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. Darrick Horton, CEO and Co-Founder of TensorWave, highlighted that "power is the critical constraint in AI infrastructure" and praised Fermi for assembling the power, land, and permits needed to deliver at scale2

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Turnkey Data Center Solution with Phased Delivery Starting 2027

The lease agreement is structured as a turnkey data center lease, with Fermi responsible for developing, constructing, and delivering the facility while TensorWave takes occupancy in phases3

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. The initial term spans 15 years following commencement of the final delivery phase, with two renewal options of five years each2

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. Phased delivery is expected to begin in the second half of 20271

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. The lease contains customary conditions, including receipt of requisite project guaranties and financing3

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. Fermi expects certain obligations under the lease to be guaranteed by one of the global leaders in AI, though the specific company was not disclosed3

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Earnings Outlook and Analyst Sentiment Amid Execution Risks

Fermi is scheduled to report second-quarter earnings on August 13, 2026, with revenue estimates of $5.99 million and an expected loss of 6 cents per share1

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. The company expects revenue of $148.3 million for the June quarter, representing a dramatic sequential increase from the prior quarter when it reported zero revenue and a loss of $0.30 per share4

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. Eight analysts rate the stock a Buy, with a mean price target of $17.00, implying 139% upside from the current share price4

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. However, Mizuho maintained its Outperform rating with an $11 price target, citing "still-high execution risk" and assumptions around delayed tenant signings and elevated capital expenditures for turnkey requirements4

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The timeline to cash flow remains a critical focus for investors. Revenue from the TensorWave lease agreement won't begin until the second half of 2027, leaving a significant gap between current capital deployment and revenue generation4

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. Fermi continues to advance discussions with additional hyperscale, neo-cloud, and enterprise compute counterparties for capacity at Project Matador, with management expected to provide further details as agreements are finalized2

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Strategic Partnerships Signal Regional Economic Impact

The Texas Tech University System, which has partnered with Fermi on Project Matador, expressed support for the transaction and indicated its intention to work closely with Fermi toward a successful closing3

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. Chancellor Brandon Creighton stated that "TensorWave's selection of Fermi sends a strong signal about the enormous potential of this project and the Texas Panhandle" and emphasized the region's positioning "at the forefront of America's energy, AI and national security future"2

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. The Project Matador site spans an area more than half the size of Manhattan and is designed to solve what Fermi identifies as the single biggest constraint in AI infrastructure: access to large-scale, reliable power delivered behind the meter on a private grid built and operated on site2

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