Amazon Puts Foot Down on $8 Billion Deal for Generac

Generac Holdings (GNRC) has landed a massive deal with Amazon (AMZN) to supply generators for its data centers. The agreement, disclosed in a regulatory filing on Wednesday, is worth up to $8 billion and will see Generac deliver the first tranche of generators by calendar years 2027 and 2028.

As part of the deal, Amazon has agreed to buy up to 1.69 million shares of Generac at a set price of $200.93 per share. This represents a significant investment for Amazon, with the potential to earn roughly $340 million if it exercises its right to fully complete the deal.

The agreement is seen as a major win for Generac, which has been looking to increase its sales and revenue. Analysts at Canaccord Genuity and Stifel Nicolaus have reiterated their 'buy' or buy-equivalent ratings on GNRC, with some setting target prices of $375 and $285.

The stock price of GNRC has already responded positively to the news, breaking above its 200-day simple moving average. However, it remains to be seen whether the stock can hold this level, with some analysts cautioning that chasing the rally may be a costly affair for traders.