According to reporting by Patrick Sanders with The Motley Fool, Generac Holdings’ stock increased 20% on Sept. 17, following a filing that revealed a long-term contract to supply backup power generators for Amazon’s data centers.
The filing indicates that Amazon.com NV Investment Holdings received a warrant to acquire up to 1.69 million Generac shares at $200.93 per share. Over 300,000 of those shares vest immediately, with the remaining will vest incrementally, determinant on Amazon’s generator purchases through 2033. The initial shipments are expected to reach $2.4 billion across 2027 and 2028, according to Reuters, and additional purchases potentially hitting $8 billion.
Generac Holdings, based in Waukesha, Wis., manufactures portable and standby generators for residential, commercial, data center, rental, telecom and industrial markets.
They remain relatively modest, with a $10 billion market cap, compared to Amazon’s cap of $2.7 trillion. According to Sanders, Generac is becoming a critical AI infrastructure supplier, as hyperscalers are in need of their data centers having dependable backup power. Even during brief electrical outages, equipment can be ruined and AI workloads can be disrupted. The power requirements for data centers require a lot for server processing, climate control and networking systems.
According to Sanders, Generac previously disclosed a $700 million agreement with an unnamed hyperscaler. On June 24, the company announced a separate contract with a second hyperscale operator, which is now confirmed to be Amazon.
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