Amazon's $8 Billion Deal with Generac Sparks Stock Surge

Generac Holdings' stock skyrocketed over 40% in after-hours trading on Wednesday after it revealed a massive supply agreement with Amazon.com to furnish backup generators for its expanding data center footprint.

The long-term deal, which carries a potential payment value of up to $8 billion, underscores the surging demand for generative AI computing power and the need for hyperscale cloud providers to secure backup generation capacity.

Under the terms, Generac issued a warrant to Amazon.com NV Investment Holdings, allowing it to acquire up to 1.69 million shares of Generac common stock at an exercise price of $200.93 per share. If fully exercised, this stake would be worth around $340 million based on the strike price.

The initial orders under the supply agreement cover backup generators slated for delivery in 2027 and 2028, with an expected value of approximately $2.4 billion. This represents a significant portion of Generac's current annual revenue run rate, and the potential to scale toward $8 billion suggests Amazon views this relationship as a long-term strategic partnership.