Amazon Deal Sends Generac Stock Soaring 18% on $2.4B Data Center Commitment
Generac stock surged 18% on Thursday after the company announced a long-term agreement to supply backup generators for Amazon's data centers. The deal is strategically significant for Generac, which has committed to tripling its manufacturing capacity for large-format generators by August 2027.
The initial commitment covers $2.4 billion of generator deliveries in 2027 and 2028, with the broader arrangement potentially reaching $8 billion depending on Amazon's future purchases and payments. This validation of Generac's effort to move deeper into large-scale data-center power comes as artificial-intelligence data centers require enormous amounts of power that cannot simply shut down when the grid experiences a disruption.
Generac's equipment provides backup generation that can keep servers running during outages or while new grid capacity is being connected. Amazon received warrants to purchase up to 1.69 million Generac shares at $200.93 each, giving it exposure to Generac's success and aligning the two companies over the life of the agreement.