Generac Holdings Inc. (GNRC) shares jumped sharply in premarket trading Thursday after the company disclosed a long-term supply agreement with Amazon Data Services for backup generators aimed at AI data centers. The stock rose as much as 35% in premarket before settling to an 18.4% gain at a close of $207.23.
The agreement is valued at up to $8 billion, making it one of the largest supply contracts in Generac’s history. Initial deliveries are expected to total $2.4 billion across 2027 and 2028, averaging roughly $1.2 billion per year relative to Generac’s total 2025 revenue of $4.2 billion.
As part of the deal, an Amazon subsidiary received warrants to purchase up to 1,693,745 Generac shares at an exercise price of $200.93 per share, a potential investment of more than $340 million. Approximately 308,000 warrant shares vested immediately, while the remainder vest as Amazon’s cumulative spending on Generac generators hits milestones up to $8 billion. The warrants expire on September 16, 2033.
The agreement confirms Amazon as Generac’s second hyperscale data center customer. Generac’s data center backlog had already reached around $1.6 billion before the deal was disclosed. The contract is global and covers data centers outside the United States as well.
Analyst reactions were mixed but generally positive. Barclays reiterated an Equalweight rating with a $278 price target, while Cantor Fitzgerald raised its target to $333 and Needham reiterated a Buy rating with a $282 target. Roth Capital raised its target from $214 to $250, calling the deal transformational and noting increasingly positive risk/reward.
