When a $150 million funding agreement disappears overnight, you'd expect the company's stock to take a hit. And Fermi Inc. (FRMI) delivered exactly that, dropping 40% in pre-market trading on Friday and wiping out roughly half its market cap. Here's the weird part: the analysts covering the stock barely reacted at all.

Their price targets still look like they're covering a company with a hiccup, not one staring into the abyss.

The Deal That Wasn't Really a Deal

The market freaked out over the termination of an Advance in Aid of Construction agreement. That sounds scary, but here's what actually happened: a non-binding funding arrangement expired without ever delivering a single dollar to Fermi. No money changed hands. No construction stopped.

Traders read the headlines as "first tenant abandons ship." The regulatory filings tell a different story — more like "exclusivity period ended" while lease negotiations continue. Management says they're already talking to additional potential tenants for 2026.

Meanwhile, the actual asset driving this story — Project Matador, a Texas power facility — hasn't changed at all. The land is locked down, construction crews are working, and the company's grid interconnection advantage remains intact.

Wall Street Stands Pat

If this were a fundamental problem with Fermi's business model, you'd expect someone on Wall Street to slash their numbers. That didn't happen. Macquarie held its $35 price target. UBS stayed at $30. Cantor Fitzgerald stuck with $27, and Stifel reaffirmed $29.

For a stock now trading in single digits pre-market, those aren't sympathy targets. Those are "our thesis is still intact" targets.

Timing Problem or Structural Problem?

Look, Fermi still has work to do. They need funding, they need signed tenants, and they need to execute flawlessly on building power infrastructure in Texas. Those are real risks. But losing a non-binding letter of intent after three weeks isn't the same as losing the underlying business opportunity.

The selloff priced in a broken investment thesis. The actual situation looks more like a scheduling delay. If Project Matador delivers power on schedule, Friday's panic selling might end up looking like most AI infrastructure overreactions: too fast, too emotional, and way too cheap.