Generac Surges on Amazon Deal: Warrants Give Hyperscaler Equity Exposure
Generac stock GNRC surged 34% in premarket trading on Thursday after Amazon committed billions of dollars to backup generators for its expanding data centre network. The deal gives Amazon more than just equipment - it also provides warrants allowing Amazon to buy up to 1.69 million Generac shares at an exercise price of $201 each.
The agreement is substantial, with initial deliveries worth $2.4 billion across 2027 and 2028, and payments tied to the broader relationship potentially reaching $8 billion. In return for this commitment, Amazon gains equity exposure as it spends more on generators from Generac.
Generac expects its backlog to be replenished beyond 2027 thanks to the deal, which addresses questions about the company's growth prospects. The agreement provides concrete evidence of Generac's ability to win large commercial and industrial generator contracts, including with hyperscalers like Amazon.