Geothermal startup Fervo Energy said Monday it plans to raise up to $1.3 billion in its initial public offering, capitalizing on surging electricity demand from tech companies powering AI data centers.
The company set a price range of $21 to $24 per share. At the top end, Fervo would be valued at roughly $6.5 billion. That’s more than double the valuation it reportedly sought earlier this year when it confidentially filed with the SEC.
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Fervo will trade on the Nasdaq under the ticker FRVO.
Market Tailwinds from AI Boom
Fervo’s IPO comes just weeks after nuclear power startup X-energy raised $1 billion in an upsized offering. X-energy’s market cap now sits above $8 billion, up from a targeted $7 billion at launch.
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Both companies have benefited from the same trend: tech giants racing to secure electricity for AI data centers. The scramble has pushed the cost of new natural gas power plants up 66% over the past two years, according to industry data.
“The demand for clean, reliable power is historic,” said Tim De Chant, a climate reporter covering the deal. “Fervo is positioning itself as a direct competitor to natural gas.”
Cape Station Economics
Fervo’s first large-scale project, Cape Station in Utah, is central to its pitch. The company says the plant will generate electricity at $7,000 per kilowatt of installed capacity.
Its long-term goal is to drive that cost down to $3,000 per kilowatt. At that level, geothermal would become cost-competitive with natural gas, Fervo claims.
Industry watchers note that hitting that target is key. “If Fervo can deliver on its cost roadmap, it could reshape baseload power markets,” one analyst said. “But it’s a big if.”
Geothermal’s Place in the Grid
Geothermal energy provides steady, round-the-clock power, unlike intermittent solar or wind. That makes it attractive for data centers that run 24/7.
But the technology has historically been expensive and geographically limited. Fervo uses advanced drilling techniques adapted from the oil and gas industry to tap deeper, hotter rock formations.
The company says its approach can unlock geothermal resources across the western United States and beyond.
What’s Next
Fervo’s IPO is expected to price in the coming weeks, pending market conditions. The company will use proceeds to fund Cape Station and other projects.
If successful, the listing could open the door for other geothermal startups to go public. “This is a bellwether for the sector,” the analyst added.
Fervo’s SEC filing provides full details on its financials and risk factors.
This article was produced with AI assistance and reviewed by our editorial team for accuracy and quality.
