Generac Stock Jumps on Amazon Deal Worth Billions

Generac's stock surged about 34% in extended trading on Wednesday after Amazon committed billions of dollars to backup generators for its expanding data-centre network. The agreement is substantial, with initial deliveries worth $2.4 billion across 2027 and 2028.

The deal gives Generac a marquee customer at the centre of the AI infrastructure boom, addressing questions about replenishing its backlog beyond 2027. Cantor Fitzgerald called the Amazon agreement Generac's 'most important data centre' development since its first hyperscaler win.

However, the unusual part of the agreement sits in the warrant, as Amazon can acquire up to 1,693,745 Generac shares at an exercise price of $200.9266. A total of 307,954 shares vested immediately, while the remainder vest in multiple stages as qualifying payments from Amazon rise towards $8 billion.

This creates a potential trade-off for shareholders, as the larger the commercial relationship becomes, the larger Amazon's potential equity stake in Generac could become.