Generac Inks $2.4 Billion Supply Deal with Amazon for Backup Generators
Generac Holdings has secured a long-term strategic supply agreement with Amazon. Under this deal, Amazon will purchase industrial generators and related products and services for data center applications from Generac. The contract is valued at $2.4 billion and spans over 2027-2028. In addition to the supply agreement, Amazon will receive an equity warrant that can deliver approximately 1.69 million Generac shares, representing about 2.6% of fully diluted shares.
The warrant economics are tied to Amazon's cumulative purchasing activity. Upon signing, 307,954 shares vested immediately, while the remainder vests incrementally as Amazon and its affiliates make qualifying payments for industrial generators under the commercial agreements. Vesting continues until cumulative qualifying payments reach $8.0 billion, with vesting occurring in tranches based on billion-dollar increments through 2033.
This agreement is global and includes data centers outside the United States. Generac's recent performance has also received a positive response from analyst firms. Cantor Fitzgerald raised its price target for Generac to $333, citing confidence in the company's data center strength. Needham reiterated its Buy rating, maintaining a price target of $282, noting that the tariff refund significantly boosted the company's reported results.