Geothermal Firm Fervo Soars 35% After $1.89 Billion IPO
(Bloomberg) -- Fervo Energy Co. shares jumped 35% in their trading debut after the geothermal energy developer raised $1.89 billion in an upsized US initial public offering.
Shares of the Houston-based firm closed at $36.54 each on Wednesday, versus an IPO price of $27. The listing priced above the marketed $25 to $26 range, which had been raised.
The trading gives Fervo a market value of $10.4 billion based on the outstanding shares listed in its filings. The IPO drew orders for about 15 times the number of shares available, people familiar with the matter have said.
With backing from Bill Gates’ investment firm Breakthrough Energy Ventures and shale oil producer Devon Energy Corp., Fervo is among a number of energy producers seeking to capitalize on the growing power demand for data centers. The company has about a $7.2 billion potential backlog of contracted revenue from power purchase agreements across its full portfolio, according to the filings.
Fervo uses horizontal drilling and multi-stage hydraulic fracturing to produce geothermal energy at its pilot project in Nevada, and it expects to deliver power at its Cape Station project in Beaver County, Utah by the end of 2026, marking its first commercial station.
The project would be one of the world’s largest geothermal projects with 500 megawatts of power capacity, and the upsized IPO will help the company complete phase two of the station targeted for 2028, according to Fervo Chief Executive Officer Tim Latimer.
“There’s just a laser focus of investors right now on what are we going to do to solve the power demand imbalance we’re seeing in the country right now,” Latimer said in an interview. “There’s room for a lot of folks and I think that’s where you’re seeing investors place their bets.”
Fervo also has power agreements with Southern California Edison Co., Alphabet Inc.’s Google and Shell Plc. Alphabet was part of a $462 million investment round in December.
The geothermal company is pledging that its future projects could supply more power to the US’ growing fleet of data centers.
That’s why geothermal is one of the only renewable energy sectors that has escaped the wrath of the Trump administration, a tailwind that has helped boost Fervo and its peers. Fervo is the first startup to commercialize an enhanced geothermal system, but questions remain around the technology’s long-term cost improvements, productivity of the wells and other barriers to success.
“Whether you’re a power sector lifer or you’re a tech investor that’s trying to wrap their heads around how do you actually power these data centers, we find we spend a lot of time kind of teaching people what our role in the sector is,” Latimer said.
Geothermal energy has been unpopular for many years because it is expensive and hard to access, but Fervo and other companies are working to lower the cost by applying oil and gas fracking techniques to make geothermal more accessible. Still, geothermal power represents less than one percent of global electricity generation.
Latimer was expected to have 48% of the voting power in the company after the offering, down from 54%, the filings show. Chief Technology Officer Jack Norbeck was set to have 14% of the votes, versus 16% before the IPO.
Fervo had a net loss of $70.5 million on revenue of $138,000 in the year ended Dec. 31, 2025, compared with a net loss of $41.1 million on revenue of $199,000 a year earlier, according to its filings.
The offering was led by JPMorgan Chase & Co., Bank of America Corp., Royal Bank of Canada and Barclays Plc. Fervo shares trade on the Nasdaq under the symbol FRVO.
(Updates with closing price in first three paragraphs, adds CEO comment in sixth paragraph.)
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