Why Generac Stock Soared Today
Key Points
Generac will provide crucial backup power to Amazon's data centers.
Amazon could invest as much as $340 million in Generac.
- 10 stocks we like better than Generac ›
Shares of Generac (NYSE: GNRC) surged on Thursday after the generator maker entered into a lucrative partnership with Amazon.com (NASDAQ: AMZN).
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This deal has the potential to be a game changer for Generac
Amazon will buy up to $8 billion worth of Generac's backup power generators for its artificial intelligence (AI) data centers under a long-term supply agreement. Initial deliveries are projected to total $2.4 billion in 2027 and 2028.
For context, Generac earned $4.2 billion in revenue in 2025.
As part of the deal, Amazon received a warrant to purchase up to 1,693,745 shares of Generac's stock at an exercise price of $200.9266 per share. That's a total of over $340 million.
Nearly 308,000 of those shares are already vested. The rest will vest over time as orders are placed and paid for. The warrant expires on Sept. 16, 2033.
A valuable seal of approval
Daat centers run on electricity. Generac's generators can supply uninterrupted power during blackouts or other temporary outages.
Gaining Amazon as a marquee customer and potential investor provides a major vote of confidence for the quality of Generac's equipment. That could lead to additional supply deals with other cloud computing giants, and, by extension, more gains for Generac's shareholders.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
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