Amazon Deal Drives Generac Shares Above $207 Amid Data Center Growth
Generac Holdings Inc (GNRC) has secured a landmark deal with Amazon to supply backup power systems for its data centers. The agreement, worth an initial $2.4 billion and potentially expanding to $8 billion, is driving shares of the company above $207 per share.
The commercial and industrial segment of Generac's business saw growth of 29% year-over-year, contributing to a rise in operating margins from 9.5% to 14.7%. The company's recent acquisition of Enercon Engineering has strategically positioned it for opportunities with hyperscalers and data centers.
The analyst who wrote the original article reiterates a 'buy' rating on GNRC, citing its sector-premium multiple due to exposure to the data center market. However, they advise close monitoring of margins and execution risks.