Fervo Energy (NASDAQ: FRVO) signed a 396-megawatt power purchase agreement with Google (NASDAQ: GOOGL) on 1 September 2026, its largest geothermal power deal to date. The contract covers electricity from Fervo’s Cape Station enhanced geothermal project in Utah.
Shares in Fervo jumped 14.77% to $17.6513 in the 24 hours after the announcement, according to Reuters. The move followed a filing that Fervo made with US regulators disclosing the terms.
Largest Fervo geothermal deal to date includes expansion option
Fervo’s own account of the agreement, filed as an exhibit to an 8-K with the Securities and Exchange Commission, describes the PPA as the world’s largest enhanced geothermal power agreement to date. It includes an option for Google to expand offtake by roughly 600MW, taking total potential capacity to close to 1 gigawatt by June 2030.
The Cape Station project, in Beaver County, Utah, is targeted to come online in 2028. Google has backed the site before: Fervo previously raised $462m in project financing with Google’s support, and the plant is billed as aiming to become the largest enhanced geothermal system in the world once fully built, according to reporting from DatacenterDynamics.
The deal builds on an existing relationship. Fervo and Google previously agreed a 115MW Clean Transition Tariff arrangement, and in March 2026 signed a non-binding framework covering up to 3 gigawatts of potential future capacity. The 396MW PPA is described as the first major binding tranche drawn from that framework, as first reported by Crypto Briefing.
Losses widen even as revenue stays near zero
The contract lands as Fervo continues to burn cash with almost no revenue booked. The company reported a net loss of $55.915m in the second quarter of 2026, on revenue of just $113,000, according to its 10-Q filing. That followed a first-quarter loss of $31.83m on revenue of $61,000, filed with the SEC in June.
The widening losses between the two quarters — from $31.83m to $55.915m, even as revenue crept up from $61,000 to $113,000 — underline how far Fervo remains from commercial-scale generation. Diluted losses per share were $3.72 in the first quarter and $0.38 in the second, per the company’s SEC filings. Fervo completed its initial public offering at $27.00 a share in May 2026, a level the stock has not approached since.
Rally still leaves stock well below recent highs
Despite Monday’s jump, FRVO remains down 24.6% over the trailing 20 trading days, with a high of $25.31 and a low of $14.75 across that window. Trading volume ran at more than double the 20-day average as the news broke, consolidated exchange data show.
Daily short-sale activity in the stock gave no sign of an unusual short-covering spike ahead of the announcement: the short-sale ratio stood at 0.549 on 31 August, down from 0.788 three days earlier, according to FINRA data. That pattern suggests the rally reflects fresh buying on the contract news rather than a squeeze unwinding short positions built up during the prior slide.
The deal also lands against a backdrop of rising long-term borrowing costs. The 10-year US Treasury yield stood at 4.73% on 28 August 2026, up from 4.67% the prior reading, Federal Reserve data show — a backdrop that makes capital-intensive, pre-revenue developers like Fervo more sensitive to financing costs even as offtake demand from hyperscalers grows.
Google’s own disclosures around the relationship include a Form 4 filed by an Alphabet-linked reporting person on 31 August, a day before the Fervo announcement, according to SEC EDGAR records. Market participants will now watch whether Google exercises its option to expand the agreement toward the near-1-gigawatt ceiling ahead of the June 2030 deadline, and whether Cape Station stays on track for its 2028 start-up date.
This article is for information only and is not investment advice or a recommendation to buy or sell any asset. Markets move quickly; figures are correct as sourced at the time of writing. Always do your own research before making financial decisions.
