Amazon Locks in $2.4B Generator Deal Amid 47% Undervaluation Claims

Amazon.com (NASDAQ: AMZN) has signed a multi-year deal with Generac Holdings to supply backup generators for its global data centers, with initial deliveries valued at approximately $2.4 billion planned for 2027 and 2028.

The agreement underscores Amazon's ongoing efforts to secure the necessary infrastructure to support its rapidly expanding artificial intelligence and cloud computing ambitions.

Despite recent share price volatility, with a 30-day return down 3.18%, analysts argue that Amazon is undervalued by around 47% based on a fair value estimate of $475.09 per share against its current market price of $251.19.

The undervaluation thesis hinges on Amazon's ability to sustain high-margin growth in its AWS, advertising, and subscription services segment, projected to expand at 15% or more annually with profit margins between 30% and 40%, while its lower-margin retail operations are expected to grow at a steadier 5% to 10%.