Join us as we explore the intersection of real estate income and tech growth exposure in the booming digital infrastructure sector. We analyze Data Center REITs (Real Estate Investment Trusts), a sector currently enjoying significant tailwinds including strong demand growth driven by cloud computing, AI workloads, and edge infrastructure. This demand is coupled with constrained supply due to limitations in power, land, and permitting. The broader sector looks favorable, demonstrating strong operational metrics like year-over-year Funds From Operations (FFO) growth. However, our primary focus is on FRMI (Fermi Inc.), a highly scrutinized, newly listed stock that represents an early-stage, high-risk version of this bet. FRMI launched with an aggressive valuation, aiming to build massive capacity—a long-term goal dependent on variables and requiring massive capital expenditure (CapEx). In this episode, we address the conflict between the sector's strengths and FRMI's specific vulnerabilities: • Fundamentals vs. Risk: We weigh the opportunity against key weaknesses impacting new entrants, such as power and infrastructure constraints, technological obsolescence, and acute execution risk. Analysts have already expressed caution, noting FRMI is “grossly overpriced” given its lack of revenue history. • The Technical Picture: We review the initial trading data following FRMI's October IPO. We chart the stock's extreme early volatility, noting its surge above the IPO price followed by a short-term bearish downtrend. The price action has been characterized by lower highs and lower lows, reflecting a cautious sentiment in the short term. • The Long-Term Strategy: We outline a prudent long-term strategy for FRMI holders, advising that it be treated as a high-upside “moonshot” component. Learn the key metrics and milestones to monitor vigilantly, including tenant lease-up/occupancy, FFO growth, and capital raise terms. We discuss why scaling in gradually and tying price movement to performance—not just hype—is essential to avoid speculative bubbles. If FRMI consistently delivers on fundamentals, the long-term thesis is strengthened; if it underperforms, investors must be ready to reduce exposure. Tune in to understand the complex forces driving this speculative stock.

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