Fervo Energy valuation tops $10 billion in geothermal IPO

On Wednesday, Houston-based geothermal energy startup Fervo Energy made its public market debut on the Nasdaq stock exchange. The company raised $1.89 billion in an upsized initial public offering (IPO), with its stock popping 33% on its first day of trading to push its market valuation past $10 billion.

The IPO details include:

• Amount raised: $1.89 billion, netting the company $500 million more than anticipated after selling an additional 14.6 million shares.
• Valuation: Surpassed $10 billion on its debut, up from an initial valuation of around $7.6 billion.
• Share price: Priced at $27 per share before the first-day pop.

Fervo’s successful debut reflects a broader trend of hyperscalers—large-scale cloud and data center operators—seeking consistent power. Geothermal energy provides baseload power, meaning it is a power source that generates electricity 24/7. This constant availability has made clean energy startups highly attractive to investors looking to power AI infrastructure. Fervo’s debut marks the second successful energy IPO in recent weeks, following nuclear startup X-energy’s own upsized public offering.

Fervo is developing two primary projects with distinct capacities. At Cape Station in Utah, the company plans to generate 500 megawatts of power when the first phase is complete. While Fervo is currently permitted for 2 gigawatts of geothermal energy capacity at the site, Sarah Jewett, Fervo’s senior vice president of strategy, reported that a third-party engineer identified enough heat on-site for up to 4 gigawatts of capacity. Separately, Fervo is developing Corsac Station in Nevada, where Google will buy 115 megawatts of electricity. To build these sites, Fervo adapts directional drilling techniques from the oil and gas sector. The company has worked to lower its expenses, reducing drilling times and costs from an initial $1,000 per foot after drilling 14 wells.

The strong market reception prompted Fervo to repeatedly upsize its offering during its roadshow. “As we saw the demand come in, there were just enough signals pointing towards upsize being not only within the realm of possibility, but the realm of the encouraged,” said Jewett. She added that Fervo is also seeing an increasing amount of behind the meter commercial interest, referring to customers seeking a direct connection to the energy source rather than drawing from the public grid. This follows a previous funding round in December, when Fervo raised $462 million.

Why it matters

Fervo Energy’s successful IPO, fueled by high demand from AI data centers for consistent power, signals a growing investor appetite for geothermal energy as a baseload power source.