By Avi Salzman

Hot rocks are a hot investment. Investors will find out just how hot today.

Fervo Energy, a Houston-based geothermal energy firm that drills deep into the earth to harness steam to generate electricity, sold $1.9 billion worth of shares at $27 a share late Tuesday. The stock will start trading on the Nasdaq today under the ticker FRVO.

The capital raise was larger than the $1.3 billion the company initially anticipated, and it values Fervo at a market cap of around $8 billion.

Fervo is backed by Bill Gates, who sees geothermal as a clean and reliable way to generate electricity. The company reported just $138,000 in revenue last year and is spending heavily, leading to a $57.8 million loss. But it has partnerships with tech firms like Alphabet, who think geothermal could help it power things like data centers while sticking to its goals to decarbonize operations.

Fervo says it has signed contracts representing approximately $7.2 billion in potential revenue backlog. It has a long way to go before realizing that revenue. The company has a 3.5-megawatt project operating today, enough to power a few thousand homes, and is working on a much larger project in Utah that could generate more than 100 times as much power as the first one.

Geothermal projects have been around for decades, but Fervo says it has cracked the code to unlocking much more energy from the technology. Historically, companies have only been able to operate geothermal plants in a few locations that have the right mix of water and heat underground. Fervo says it can use technologies borrowed from the shale revolution, drilling through rocks and using new techniques to make many more areas geothermal friendly.

To make money and attract more customers, Fervo will have to bring down the cost of its technology. Its big Utah project is expected to cost around $7,000 per kilowatt to build, more than twice as expensive as building a natural gas plant. The company is working to get the cost to $3,000, which would arguably make it a much better investment than gas given that gas plants still need to pay for fuel.

Write to Avi Salzman at avi.salzman@barrons.com

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May 13, 2026 10:32 ET (14:32 GMT)

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