Fermi Inc. has entered a new phase this week — the earnings are done, the stock dropped hard, and short sellers are rebuilding positions at pace.
The headline number tells the story bluntly. Short interest jumped 66% in a single week to 7.7% of free float, the fastest build in months. The move accelerated after August 13, when Fermi reported and the stock fell nearly 16% in a day. Shorts had actually been covering steadily since mid-July — SI had dropped from roughly 11% of float on July 13 to under 5% by July 24 — making the current re-entry look deliberate rather than carried. The ORTEX short score has climbed to 60.8 from 51.3 a week ago, confirming the shift in momentum. Borrow conditions, notably, offer no friction: availability is a comfortable 298%, meaning nearly three shares are available to borrow for every one already shorted. Cost to borrow is just 0.53% — too cheap to deter anyone. This is a freely accessible short with genuine conviction behind it.
Options positioning is skewed decisively to the call side, which is the one genuine tension in the setup. The put/call ratio is running at 0.27 — just below three calls for every put — and while that's modestly above its 20-day average (z-score of 1.7), it's still an overwhelmingly bullish options skew. Call buyers are betting on recovery even as short sellers push the other way. That divergence is worth watching: either the options crowd expects a sharp bounce from oversold levels, or the positioning is stale and will re-price as the post-earnings narrative settles.
On the Street, Macquarie cut its target to $15 from $18 yesterday while keeping its Outperform rating — a direct response to the print. That follows a cascade of reductions that the pre-earnings note already detailed: Mizuho to $11 from $27, Stifel to $17 from $29, Evercore downgrading to In-Line in May. The consensus mean of $19 — implying more than 190% upside from $6.40 — is now a theoretical construct rather than a credible anchor, given the unanimous downward direction of individual revisions. Bulls hold their ground on the AI infrastructure thesis: Fermi builds and leases high-performance computing facilities for hyperscale customers, with analysts modelling EBITDA around $945m by FY27. Bears cite revenue that keeps slipping into the future and a business model that remains pre-commercial in important respects. The PE multiple at 69x and EV/EBITDA at 9.1x reflect a market still paying for optionality, not earnings. The EV/EBITDA has compressed roughly 2 turns over the past month as the stock has drifted lower.
Institutional ownership adds a layer of context. The top three holders — Toby Neugebauer at 28.9% and two other concentrated positions — make this a tightly held name. James Perry trimmed 8.7 million shares as recently as July 16. BlackRock added 3.4 million shares through July 31. The ownership picture is not one of institutional flight, but concentrated insiders with mixed recent activity provide limited directional signal. Insider data is stale through early June, when a Chief Level Officer sold roughly $1 million in stock after receiving a 1 million-share award. Among the closest correlated peers, EQIX gained 5.7% on the week and IRM rose 6.8%, suggesting data centre REIT sentiment broadly recovered — making FRMI's 3.6% weekly gain look like underperformance on a relative basis, and the post-earnings discount more stock-specific than sector-driven.
The next scheduled catalyst is November 13. Between now and then, the key variable is whether Fermi can announce tenant negotiations that validate the FY27 revenue timeline — without that, the pressure from rebuilding shorts and a disbelieving analyst community is likely to remain the dominant narrative.
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