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Investing.com - Rothschild Redburn initiated coverage on Fermi (NASDAQ:FRMI) with a Buy rating and a $31.00 price target on Monday, representing significant upside from the current trading price of $23.54. According to InvestingPro data, the stock has experienced high price volatility, with shares down 17% over the past six months.
The investment firm views Fermi as a "pureplay on Artificial Intelligence (AI) power" that offers differentiated large-scale off-grid power solutions for AI companies facing grid access constraints.
Rothschild Redburn noted that AI leaders are encountering "mounting social and regulatory scrutiny" as their power consumption from traditional electrical grids continues to grow.
The firm acknowledged that risks for Fermi "are not insignificant" at this early development stage but described the company’s progress to date as "impressive."
Rothschild Redburn sees the valuation risk/reward as "skewed to the upside" with potential for derisking the equity story over the next 12-18 months.
In other recent news, Fermi has garnered significant attention following its initial public offering, which was priced at $21 per share. The company’s shares began trading at $25 on the Nasdaq Global Select Market, exceeding the IPO price. This strong market debut saw Fermi’s stock surge by 55% on its first day, closing at $32.53. In premarket trading, the stock experienced further gains of up to 21%.
In terms of analyst coverage, Mizuho initiated coverage on Fermi with an Outperform rating and set a price target of $27. UBS also began coverage with a Buy rating and a $30 price target, citing the company’s growth potential in data centers. Similarly, Stifel initiated coverage with a Buy rating and a $29 price target, based on a long-term discounted cash flow model. These developments highlight growing investor interest in Fermi’s plans to build substantial power generation capacity.
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