Geothermal startup Fervo Energy rises 33% on IPO debut

Fervo Energy’s geothermal IPO jumped 33% after pricing following surging demand from AI and data center operators.

A geothermal startup’s IPO debut kicked off with a big pop, underscoring how quickly the AI data center boom is reshaping demand for reliable electricity.

Fervo Energy. a geothermal power developer. saw its market value climb above $10 billion shortly after it began trading. after shares initially jumped another 33%.. The Houston-based company’s first day performance was tied directly to investor appetite for the kind of power that can support data centers running at high uptime.

The public offering itself began with an upsized deal that reflected that interest.. Fervo raised $1.89 billion in an initial public offering on Wednesday. a marked shift from the valuation level set at launch. which initially placed the company around $7.6 billion.. Demand was strong enough that the company and its bankers increased the offering size multiple times. including selling an additional 14.6 million shares and lifting the price range twice before settling at $27 per share.

Management suggested the rapid pace of demand was a key reason the offering kept expanding.. Sarah Jewett. Fervo’s senior vice president of strategy. said the company heard questions on its roadshow about why it wasn’t raising more. and that once signals indicated the market would support an upsized structure. expanding the deal became encouraged rather than speculative.

Fervo’s story is landing with investors for broader reasons that extend beyond geothermal’s clean-energy branding.. As data centers and AI-focused companies compete for power. they have been seeking electricity that is steady and dependable. not only abundant.. In that environment. energy sources that can generate around the clock tend to carry extra value. and geothermal increasingly fits that profile.

This IPO also arrived as the market has shown momentum for other parts of the energy transition. It was the second energy stock offering to receive a strong reception within the span of a few weeks, following X-energy, a nuclear startup, which raised $1 billion in an upsized IPO.

While geothermal is not a new idea, Fervo belongs to what it and others describe as enhanced geothermal.. The approach focuses on drilling deeper to access hotter rock, aiming to expand where geothermal can be commercially viable.. Fervo’s method includes directional drilling techniques associated with the oil and gas industry. a crossover that the company frames as part of how it seeks to make projects work at scale.

The IPO provided more than just a valuation milestone.. Fervo said the offering netted the company $500 million more than it anticipated. creating additional financial flexibility as it develops its Cape Station power plant in Utah.. The plant is scheduled to begin operation this year. and the company expects its first phase to reach 500 megawatts over roughly three years.

For the initial phase, the size was tied to the grid connection Fervo was able to secure.. The company has permission to develop up to 2 gigawatts at Cape Station. and it has applied to expand the interconnection size accordingly.. Jewett also pointed to a third-party engineering assessment suggesting enough heat on site for up to 4 gigawatts of capacity. implying that technical potential may outpace current grid access.

If grid interconnection grows, additional electricity could be routed into the broader power system.. But even without immediate upgrades. Fervo has been fielding interest from businesses that want to connect directly rather than rely solely on traditional utility pathways.. Jewett said inquiries have been increasing for “behind the meter” connections.

Cape Station is not Fervo’s only project. The company is also further along at Corsac Station in Nevada, where Google will buy 115 megawatts of electricity. That deal highlights how major tech buyers are increasingly looking to lock in dependable energy as their compute needs expand.

A core appeal behind geothermal—especially for operators running large digital workloads—is its ability to function as baseload power.. Unlike generation that depends on weather or time of day. geothermal can provide electricity 24/7. making it attractive for environments where uptime is valued and outages carry real costs.. That has helped shift geothermal from being one clean-energy option among many to a technology that is starting to look tailor-made for tech-driven infrastructure demand.

Fervo’s push is also shaped by cost and speed targets.. The company has been racing to reduce the time required to drill new wells. which it previously said took dozens of days and cost more than $1. 000 per foot.. After drilling 14 wells. Fervo reported it has cut both drilling time and cost per foot by two-thirds. a sign investors may be watching closely as they evaluate whether the model can scale efficiently.

The company’s timing was also framed as a long-awaited moment.. Fervo announced in December that it had closed a $462 million funding round. and climate and energy investors interviewed around that time broadly expected an IPO. with demand from hyperscalers and early data from Cape Station helping suggest the company could get past the “valley of death.” With the IPO now completed. Fervo appears to be moving into a phase where it must translate early momentum into delivery and operational scale.

Fervo Energy IPO enhanced geothermal AI data centers baseload power hyperscaler electricity Nasdaq FRVO energy startup