Fermi (FRMI) Climbs 13% as Funds Flow Back to AI

We recently published 10 Stocks Shining Bright Amid Wall Street’s Dull Spell. Fermi Inc. (NASDAQ:FRMI) is one of the top performers on Tuesday.

Fermi surged by 13.39 percent on Tuesday to close at $9.74 apiece as investors poured funds back into AI and high-performance computing companies, having priced in concerns about heavy investments in the sector.

Fermi Inc. (NASDAQ:FRMI) rallied alongside its counterparts riding the AI wave, including Applied Digital Corp., after technology stocks took a beating on Monday amid concerns about the technology giants’ heavy billion-dollar spending on the sector.

Additionally, investors appeared to have bargain-hunted after Fermi Inc. (NASDAQ:FRMI) nosedived the previous day following news that one of its major tenants pulled out from an earlier leasing agreement.

In a regulatory filing last week, Fermi Inc. (NASDAQ:FRMI) said that the prospective tenant, which it refused to name, had inked a $150 million leasing agreement with the company earlier, but later decided to pull out of the agreement.

However, Fermi Inc. (NASDAQ:FRMI) said that it remains in discussions with other companies for potential leasing agreements.

The capacity was supposed to come from its 11 GW data center campus in Texas.

In support of the campus development, Fermi Inc. (NASDAQ:FRMI) earlier this month inked a power supply agreement with Southwestern Public Service Company (SPS), a subsidiary of Xcel Energy, for the delivery of up to 200 MW of power capacity to the data center.

While we acknowledge the potential of FRMI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.