Fermi Inc. (NASDAQ:FRMI) is one of the stocks Jim Cramer put under the microscope. Cramer said that it is too early for him to be comfortable recommending the stock. He stated:
“Now, I find that this whole thing is kind of astonishing. See, this is a company that didn’t exist at the beginning of the year. Right now, I think it’s kind of more of a business plan than an actual business… Given the nature of this business, it could be a long, long time before these guys are turning a profit. So the restructure, I found it was quizzical. By the way, in case you hadn’t gathered this by now, there are really no financials to discuss with Fermi at this point. The company hasn’t had any revenue, and it’s incurred a little over $6 million in expenses through its first nine months of existence…
I want to steer clear of this one. Again, this is more of a business plan than a business. I like hope, you know that. To be fair, Fermi seems like a, it’s got a pretty well thought-out plan, and if it all works out over the next decade, then maybe you can justify the stock’s current $19 billion market capitalization. In my view, though, no business plan is worth 19 billion… See, I’m not just ready to take that leap of faith. I think this company’s a long, long way from having a real business that we can assign a legitimate valuation to.
So far, Fermi raised $350 million over the summer and another 600 to 700 million today with the IPO. Unfortunately, if you want to build a nuclear power plant and a big data center campus, that’s nowhere near enough money. So where are they going to get it?
Here’s the bottom line: I generally do not want to root against the data center stocks because I like so many of them. But when something as ill-advised as Fermi can come public with a bang like this, it makes me nervous. This one’s way too early, frankly, and too, let’s say, half-baked for me to feel comfortable recommending it.”
Stock market reports printed on a sheet of paper. Photo by RDNE Stock Project on Pexels
Fermi Inc. (NASDAQ:FRMI) is developing large-scale next-generation electric grids designed to power advanced artificial intelligence. The company’s planned campus will integrate nuclear, natural gas, solar, battery storage, and utility power to deliver highly redundant gigawatt-scale energy.
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Disclosure: None. This article is originally published at Insider Monkey.
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