May 11 (Reuters) – Geothermal power developer Fervo Energy said on Monday it was targeting up to a $7.37 billion valuation in its U.S. upsized initial public offering, underscoring strong investor interest for the listing.
The Houston, Texas-based geothermal company is now seeking up to $1.82 billion in its IPO by offering 70 million shares priced between $25 and $26 apiece.
It was earlier seeking a valuation of $6.5 billion, offering 55.6 million shares priced between $21 and $24 apiece.
Fervo’s upsized offering comes as surging use of AI and the resulting boom in data centers pushes up electricity usage, pressuring the U.S. power grid and increasing the need for reliable energy.
AI-linked offerings have also been at the forefront of the IPO market this year as investors pile into high-growth sectors.
Fervo is among three companies – all related to AI infrastructure – set to price their billion-dollar offerings this week, the most in a single week since 2021, according to Renaissance Capital, a provider of IPO-focused research and ETFs.
Unlike traditional geothermal energy that relies on rare conditions such as volcanic activity, Fervo is developing advanced systems that can generate round-the-clock, carbon-free electricity from the source.
The company said it also uses AI for precision drilling to access underground heat more efficiently, while lowering its surface footprint and reducing drilling risks.
It has roughly $7.2 billion in potential revenue backlog, with 500 megawatts currently under construction and 658 megawatts of contracted offtake. Its partners include Southern California Edison, Google and Shell.
In his second term, U.S. President Donald Trump has taken a more favorable stance on geothermal energy than other renewables, even as he reversed Joe Biden-era policies aimed at shifting the world’s largest economy away from fossil fuels.
J.P. Morgan, BofA Securities, RBC Capital Markets, and Barclays are the joint lead bookrunning managers. Fervo Energy will list on the Nasdaq under the symbol “FRVO.”
(Reporting by Arasu Kannagi Basil and Pragyan Kalita in Bengaluru; Editing by Leroy Leo)
