Why Generac Stock Soared Today

Source The Motley Fool

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).

An electrician is working on a generator.

Image source: Getty Images.

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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.

Should you buy stock in Generac right now?

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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.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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