Two AI power infrastructure names are ripping in premarket trade Tuesday. Babcock & Wilcox Enterprises (NYSE:BW) is up 35% after a blowout Q2 earnings report, and Fermi (NASDAQ:FRMI | FRMI Price Prediction) is up 16% after announcing the first binding tenant for its Project Matador campus. Both moves trace back to the same story: hyperscale power for AI.
Babcock & Wilcox: Earnings Blowout and Raised Guidance
Babcock & Wilcox delivered a Q2 print that few were positioned for. Revenue came in at $319.70 million against a consensus of $196.97 million, a 62.31% beat and 121.9% growth year over year. GAAP diluted EPS of $0.07 topped the $0.03 estimate, and the company swung to net income of $14.30 million from a prior-year loss of $(58.50) million.
The single line that matters most: $100.70 million of Q2 revenue came from the Base Electron project, a $2.40 billion, 1.2 GW natural gas-fired build near Center, North Dakota, designed to feed AI infrastructure. Management raised the full-year adjusted EBITDA range to $80.00 million to $105.00 million and flagged a global pipeline exceeding $14.00 billion. In July, the board also authorized a $50.00 million share repurchase program.
CEO Kenneth Young captured the tone on the release: “The growing need for reliable electricity from AI data centers, utilities, industrial customers and expanding economies is accelerating investment in power generation capacity.” He added that Base Electron is “progressing ahead of expectations and on budget.”
Fermi: First Binding Tenant Validates Project Matador
Fermi has been trading under the weight of one unresolved question since its October 1, 2025 IPO at $21.00 per share: could a pre-revenue, gigawatt-scale power campus actually land a creditworthy anchor tenant? After a prospective customer terminated a $150 million advance in aid of construction agreement in December 2025, the stock had drifted lower, down 26.50% year to date heading into this week.
The catalyst arrived after Monday’s close. Fermi disclosed a lease with TensorWave TEX1, LLC, a subsidiary of AI cloud provider TensorWave, valued at $6.5 billion over a 15-year initial term. The deal starts at 222 megawatts with expansion rights to more than 650 MW across two additional data centers, and is tied to AMD (NASDAQ:AMD) Instinct GPUs for large-scale AI training and inference. Multiple wires described it as Fermi’s first binding customer lease, the milestone management had explicitly listed as a 90-day priority in its Q1 filing.
The Bigger Picture: AI Power Is the Trade
The two moves share a common driver. Babcock & Wilcox has ridden the same wave violently over the past year, up 589.46% on a one-year basis into Monday’s close, though it entered the week down 24.1% over the past month after a hot summer run. Fermi’s tenant win directly validates the demand side of the same equation: hyperscalers and neo-cloud operators are scrambling to lock in gigawatts.
Babcock’s role is the pick-and-shovel supplier. It has secured an additional 1 GW of Siemens Energy steam turbines for future data center projects and is pursuing off-the-shelf 50 MW and 300 MW gas-fired designs for AI factories. Fermi is the customer-facing developer, with over 2 GW of generation already secured and a target of 1.5 GW cumulative capacity by end of 2027.
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