1. Fermi America filed to go public as a real estate investment trust. 2. Company targets a $13 billion valuation with a 6,000-acre data center campus. 3. Data center REITs like Fermi struggle to match returns of traditional AI stocks. 4. REITs must distribute 90% of income, limiting growth potential. 5. Interest rate sensitivity impacts REIT performance amidst AI demand boom.
Data center REITs, including Fermi, have historically underperformed high-flying tech stocks. While Fermi's offering may attract interest, competition and structural limitations suggest a muted performance.
The focus on data centers amid AI demand makes Fermi relevant, but growth limitations due to REIT structures warrant caution. Despite the growing sector, investor sentiment may remain cautious due to potential underperformance.
As Fermi constructs its facilities and scales operations, it may not see immediate returns. Structural limitations of REITs will continue to impact performance over the long haul.