Fervo Energy Raises $1.89B in IPO, Shares Up 33% on Debut

Fervo Energy, a Houston-based geothermal energy developer, raised $1.89 billion in an upsized initial public offering and saw its shares surge 33 percent on their Nasdaq debut under the ticker FRVO, pushing the company's valuation above $10 billion amid surging demand for reliable power to fuel AI data centers.

The company sold 70 million shares at $27 each after multiple upsizings from an initial target of $1.33 billion for 55.6 million shares priced between $21 and $24. Shares opened at $36 on Wednesday and climbed to $36.63 in early trading, a 36 percent gain, reflecting strong investor interest. The IPO, the largest in the energy sector since 2013, valued Fervo at around $7.6 billion to $8 billion at pricing.

Demand stems from data centers' need for baseload power that operates around the clock, independent of weather, as AI expansion strains U.S. grid capacity. Fervo develops enhanced geothermal systems, applying horizontal drilling and techniques from the oil and gas industry to access heat from deep hot rocks in more locations than traditional geothermal plants, which require specific geological conditions.

The company's flagship Cape Station project in Beaver County,...