Fermi Inc (NASDAQ:FRMI, LSE:FRMI) got a glowing write-up from Panmure Liberum as it initiated coverage of the AI-focused power developer, whose 11GW Project Matador is seen as ambitious but offering "a huge moat".
A 'buy' recommendation and a $39 target price were dished out, versus the last close price at $18.6.
Analyst Joe Brent said the Matador 'energy and AI campus' positioned the company to benefit significantly from soaring AI infrastructure demand.
"Fermi is selling competitive advantage in the AI race, not electrons," he wrote of a a company that dual-listed on Nasdaq and the London Stock Exchange in early October 2025, and has raised over $1.2 billion in equity and equipment financing.
The company’s model, as both landlord and generator, leverages a REIT structure and triple-net leases, giving it a capital-light profile with high margins, Brent said.
Panmure's forecasts calculate that the first gigawatt alone could generate $900 million in net operating income, with 11GW potentially delivering $15 billion.
The note flagged Fermi’s location in Texas, a state facing a severe power supply/demand imbalance, and its ability to “jump the queue” on gas equipment procurement.
The analysts also examined nuclear “optionality” for the 2030s, though they noted gas alone could deliver the 11GW target.
Using peer comparatives, transaction multiples, and DCF analysis, the analyst arrived at a target valuation price of $39, and an "optimistic TP" of $59.
The company's fundamentals “may appear ‘too good to be true’, but we see these as consistent with the ability to offer AI competitive advantage,” the analyst said.