Fermi shares jumped 14.5% Tuesday after the AI infrastructure developer disclosed a credit support agreement with Advanced Micro Devices tied to the first phase of its Project Matador campus in Texas, giving investors a clearer path toward financing a development that will require substantial upfront capital.
Fermi closed at $3.72 after trading as high as $4.07, with roughly 86 million shares changing hands, more than four times its recent average volume. The rally stood out during an otherwise quiet session in which the S&P 500 slipped 0.02% and the Nasdaq Composite fell 0.15%. Even after Tuesday’s gain, Fermi remains dramatically below the levels reached following its 2025 public listing.
The agreement centers on the first 222 megawatts of Project Matador, Fermi’s planned energy and AI infrastructure campus in Carson County, Texas. AMD will provide credit support connected to Fermi’s previously announced lease with TensorWave, while the two companies have also established a broader framework that could support expansion to as much as 650 MW.
For Fermi, the significance is less about AMD directly financing the construction and more about strengthening the project’s credit profile as the company works to secure outside capital. Fermi described the agreement as a “key milestone” toward project financing, while its disclosure also makes clear that additional financing still must be obtained before the development is fully funded.
The AMD Agreement Strengthens a $6.5 Billion Tenant Deal
Fermi’s first major customer agreement was signed in August with TensorWave TEX1, a subsidiary of AI cloud provider TensorWave. The 15-year lease covers a build-to-suit facility with 222 MW of total power capacity and is expected to generate approximately $6.5 billion of contracted revenue over its initial term, excluding renewal periods and any expansion.
The first portions of the facility are expected to be delivered beginning in the second half of 2027, with additional phases continuing into early 2028. Once fully built, Fermi expects the site to support tens of thousands of next-generation AMD Instinct GPUs used for large-scale artificial intelligence training and inference workloads. TensorWave also has expansion rights covering two additional buildings that could increase its total capacity at the campus to roughly 650 MW.
That makes AMD’s participation financially relevant beyond its role as a semiconductor supplier. A creditworthy technology partner supporting obligations connected with the lease could make the project easier to finance by reducing some of the counterparty risk facing prospective lenders.
AMD and Fermi also agreed to a framework for the potential second and third phases of the relationship. AMD said the collaboration is intended to increase the infrastructure available for large-scale deployments of AMD-powered AI systems as demand for computing capacity continues to rise. The framework, however, should not be treated as a committed 650-MW order: further expansion remains dependent on customer agreements, financing and project execution.
Financing Remains the Biggest Test
The stock reaction reflects progress on what has been one of the central uncertainties surrounding Project Matador. Fermi has secured the land, begun construction and assembled major power and infrastructure components, but its own regulatory filings acknowledge that completing the first phase requires significantly more capital than the company currently has available.
Fermi has said those remaining needs could be funded through a combination of project-level debt, equipment financing, tenant prepayments, strategic equity, government incentives and tax-credit monetization. As of its most recent quarterly filing, however, the company had not secured all of the additional project-level debt or strategic equity required to complete Phase 1. The TensorWave lease itself has also been subject to conditions that include obtaining the necessary project financing.
That distinction tempers the significance of Tuesday’s rally. AMD’s credit support improves the financing story, but it is not the same as Fermi announcing a fully committed construction financing package. The company still must convert the strengthened tenant arrangement into enough capital to build and deliver the facility on schedule.
Analysts nevertheless viewed AMD’s participation as an important validation point. Texas Capital Securities raised its Fermi price target to $20 following the announcement, arguing that AMD’s involvement increases the credibility of both the initial development and the potential expansion. Evercore ISI took a more measured view, noting that full financing has yet to be secured and that additional expansion will depend on securing customers and funding.
Project Matador is considerably larger than the TensorWave development alone. Fermi ultimately envisions approximately 17 gigawatts of capacity at the Texas Panhandle campus, combining natural gas generation, grid power, solar, battery storage and potentially nuclear generation. The company says more than $1.5 billion has already been invested in the site, though the full buildout remains dependent on future commercial commitments and financing.
The next important step is therefore not another capacity announcement but evidence that Fermi can close the financing needed for the 222-MW TensorWave facility and keep its 2027 delivery schedule intact. The company is scheduled to report third-quarter results on Nov. 12, when investors should get a clearer picture of Project Matador’s funding, construction progress and whether AMD’s support has translated into a completed financing package.