Amazon (AMZN) Stock Unfazed by Fermi Data Center Deal Fallout

Amazon's stock demonstrated resilience this morning, moving higher in pre-market trading despite speculation linking the tech giant to a terminated funding agreement with Fermi America (FRMI) for a Texas data center project. The news, which sent FRMI shares tumbling, has had a negligible impact on AMZN, suggesting the market views any potential involvement as insignificant to Amazon's overall prospects.

In pre-market activity, AMZN shares have edged up by 0.42%, a modest gain that contrasts sharply with the 9.27% drop experienced by FRMI during yesterday's session. The divergence highlights the market's assessment of the relative importance of the data center deal to each company. While the loss of a prospective tenant represents a significant setback for Fermi, Amazon's vast scale and diversified operations appear to insulate it from any negative repercussions.

The controversy stems from the termination of an Advance in Aid of Construction Agreement (AICA) worth up to $150 million for Fermi's Project Matador data center in Texas. The agreement was intended to support construction costs, but it was terminated after the exclusivity period expired on December 9, 2025. Fermi had anticipated that the deal would anchor the project's first gigawatt and generate more than $20 billion in payments over 20 years.

Following the termination announcement, FRMI stock price plummeted by approximately 34% on December 12, closing at $10.04. This decline brought the stock to its lowest level on record, almost 75% lower than the post IPO close.

Adding to Fermi's woes, Evercore ISI lowered its price target for the stock from $37.00 to $20.00, while maintaining an “Outperform” rating. The firm described the funding termination as a “clear negative,” raising questions about the previously executed Letter of Intent with the potential tenant and expected that it would take time for the stock to recover, given the uncertainty surrounding the project's future.

Initial reports had suggested that Amazon was the prospective tenant involved in the terminated agreement, with  the company identified as being in discussions to become the first tenant at Fermi's Texas data centers. However, Fermi and its CEO, Toby Neugebauer, have categorically denied these claims, asserting that the report was inaccurate. Amazon has not yet responded to requests for comment.

Despite the denial, the speculation underscores the intense competition in the data center market and the importance of securing anchor tenants for large-scale projects. For Fermi, the loss of the $150 million funding agreement represents a major challenge, forcing the company to seek alternative funding sources and potential tenants. The company has stated that negotiations for a lease agreement with the same tenant are ongoing and that discussions with other potential tenants have commenced.