Generac Announces $8 Billion Supply Agreement With Amazon for Data Centre Backup Generators
Generac Holdings (NYSE:GNRC) announced a long-term supply agreement with Amazon to provide industrial backup generators for its global data centre infrastructure. The deal includes initial deliveries worth approximately $2.4 billion in 2027 and 2028, with the potential total value reaching up to $8 billion over the contract's lifetime. As part of the arrangement, Amazon received a warrant allowing it to purchase nearly 1.69 million Generac shares at around $200.93 per share, representing about 3% of outstanding shares. The news triggered a strong market reaction, with Generac’s stock surging 33.7% in pre-market trading despite the Federal Reserve raising interest rates by 25 basis points on September 16. Analysts from Cantor Fitzgerald and Wells Fargo upgraded or maintained positive outlooks for Generac's shares following the announcement. The agreement adds to a $1.35 billion data centre order backlog already in place at Generac, offering long-term visibility into future revenue streams as demand for backup power solutions grows with expanding digital infrastructure.
Topics: backup generators data centres earnings/valuation M&A/partnerships