Generac Stock Jumps on $2.4B Amazon Data Center Deal
Generac Holdings Inc., a company specializing in backup generators, saw its stock surge approximately 40% in after-hours trading Thursday following a long-term supply agreement with Amazon. Under this deal, Generac will deliver backup generators worth $2.4 billion to the tech giant over a two-year period, from 2027 to 2028.
The company's market capitalization stands at around $10.33 billion, which according to InvestingPro analysis, is below its Fair Value. This has placed Generac among undervalued opportunities in the industrial sector.
Generac had a data center backlog of approximately $1.35 billion scheduled for 2027, excluding the Amazon agreement. With this new deal, the company's total identified data-center volume through 2028 now totals around $4 billion.
The announcement comes after management comments in a recent fireside chat hinted at a broadening customer base beyond its first hyperscaler customer. The company's revenue growth is forecast to accelerate to 17% in fiscal 2026, a significant improvement from the modest 0.61% growth in the last twelve months.
Cantor Fitzgerald reiterated an Overweight rating and $333 price target on Generac stock following the announcement. Needham also reaffirmed its Buy rating with a price target of $282, aligning with their estimates for adjusted EBITDA and earnings per share.