Geothermal developer Fervo Energy (FRVO.US) IPO priced at $21-24, betting on AI data center power demand.

American geothermal energy developer Fervo Energy is planning to raise up to $1.33 billion through its initial public offering (IPO) as it accelerates its commercialization efforts driven by the increasing demand for electricity from artificial intelligence data centers. According to documents submitted to the U.S. Securities and Exchange Commission, the company plans to issue approximately 55.56 million shares of stock at a price range of $21 to $24 per share. At the upper end of the range, the company's valuation would reach around $6.5 billion. Fervo is expected to list on the Nasdaq under the symbol "FRVO," with the IPO pricing date set for May 12. The offering is being led by JPMorgan, Bank of America Corp, Royal Bank of Canada, and Barclays PLC Sponsored ADR. Fervo is aiming to capitalize on the surge in electricity demand brought about by the rapid development of artificial intelligence. The company plans to primarily use its power generation capacity for data centers and has disclosed potential power purchase agreement (PPA) contract income reserves of about $7.2 billion. Currently, the company has power supply agreements with companies like Alphabet Inc. Class C (GOOG.US, GOOGL.US) and Shell (SHEL.US), with Alphabet Inc. Class C participating in the company's $462 million financing round completed in December last year. Fervo utilizes horizontal drilling and multi-stage fracturing techniques to develop geothermal resources, a technology path derived from the oil and gas industry, aimed at reducing development costs and expanding the range of geothermal resources that can be developed. The company stated that its drilling time has been reduced by about 75% and drilling costs have decreased by about 70% between 2022 and 2025. The current project cost is about $7,000 per kilowatt, with a long-term goal to reduce it to $3,000. The Cape Station project being advanced in Beaver County, Utah, has a planned installed capacity of 500 megawatts and is expected to become one of the world's largest geothermal projects. Additionally, the company has obtained additional development permits for 1.5 gigawatts. Fervo expects to achieve the first commercial power plant commissioning by the end of 2026 and reach an operational capacity of around 100 megawatts by early 2027. Overall, the company currently has about 595,900 acres of leased land, with a project scale under development of 2.6 gigawatts, and an early project reserve of over 38 gigawatts, making it one of the largest geothermal resource portfolios in the U.S. While geothermal energy has advantages such as stability and low carbon emissions, its share in the global power structure remains low, mainly due to high development costs and limited resource distribution. Fervo is attempting to break through this bottleneck with technological innovation to enable geothermal energy to be developed on a larger scale in more regions. Financial data shows that the company is still in the investment period. In 2025, the company achieved revenue of $138 million, but net losses widened to $70.5 million; the previous year had revenue of $199 million, with a net loss of $41.1 million. After the IPO is completed, CEO Tim Latimer and CTO Jack Norbeck will continue to control the company through high-voting shares.