Generac Amazon Deal: Up to $8 Billion in Backup Generators

Generac Holdings has agreed to supply backup generators for Amazon's data centers under a long-term agreement disclosed in a regulatory filing dated September 16. The Generac Amazon deal could be worth up to $8 billion, with initial deliveries expected to total about $2.4 billion across 2027 and 2028, according to the filing.

The agreement also includes a warrant giving Amazon the right to buy Generac stock, with the number of shares tied to how much equipment Amazon actually orders.

Generac shares closed the regular session on Wednesday at $175.11, little changed on the day. After the filing became public, the stock jumped more than 30 percent in extended trading, rising above $230. It surged as much as 32 percent on Thursday, the biggest intraday gain in more than 14 years, before giving back some of the advance later in the week.

What the deal includes

The agreement covers industrial backup generators for Amazon data centers, with aggregate payments potentially reaching $8 billion. Alongside the supply terms, Generac issued a warrant to Amazon.com NV Investment Holdings, a wholly owned Amazon subsidiary, for up to 1,693,745 Generac common shares at an exercise price of $200.9266 per share.

The Generac Amazon deal links the warrant directly to equipment spending. Of those shares, 307,954 vested immediately when the agreement was signed. The rest vest in stages as Generac and its affiliates receive payments from Amazon for the generators, up to the $8 billion ceiling. The warrant runs through September 16, 2033, and can be exercised for cash or on a cashless basis. It also includes anti-dilution protections and registration rights for the shares.

The exercise price of about $200.93 sat roughly 15 percent above Generac's Wednesday closing price. The stock moved past that level within hours of the disclosure. At the exercise price, the warrant attached to the Generac Amazon deal would be worth roughly $340 million.

Why data centers are locking in their own power

The agreement arrives as cloud companies rush to secure power for AI workloads. Data centers need grid electricity and on-site backup generation, and buyers have started signing long-term contracts for both rather than relying on the open market. The AI buildout driving that demand is moving fast elsewhere too, with new model launches from Anthropic and OpenAI keeping investors focused on data center infrastructure.

The Generac Amazon deal follows a pattern already emerging in the sector. Oracle reached a similar equity-linked arrangement with power supplier Bloom Energy in April 2026, as reported by US Insider. Cloud providers appear to be pairing large purchase commitments with equity stakes to keep suppliers focused on their buildouts.

Generac has been moving beyond its traditional residential generator business into industrial-scale equipment for data centers. Chief executive Aaron Jagdfeld said the Amazon deal positions the company as a long-term partner to the retailer and supports investment in large generator manufacturing capacity, Quantli reported. The company plans to grow its commercial and industrial workforce from about 2,400 employees to more than 3,000 over the next 12 months.

Rivals are seeing the same demand wave. Cummins and Caterpillar have nearly doubled their order backlogs and revenue from data center customers over the past year, Microgrid Knowledge reported. Generac's Fazil Shaikh, senior director of strategy and growth, told the publication the company is pairing natural gas generators with battery storage as it courts industrial customers, a shift from the residential business that built its name.

What the stock did this week

News of the Generac Amazon deal made Generac one of the week's most active stocks. Shares touched as high as $239 in trading around the disclosure before settling to about $205 later in the week, according to Microgrid Knowledge's reporting on the filing. Bloomberg's Stock Movers program called it the stock's best week since May, alongside a rally in crypto-linked names after bitcoin surged past 81,000. The same week brought the Federal Reserve's first interest-rate increase in more than three years, another sign of how closely markets are watching every corporate headline.

The deal also lands on a company already growing fast. Generac reported net income of $143.2 million and diluted earnings per share of $2.40 on revenue of $1.174 billion for the second quarter of 2026, up from $73.3 million and $1.24 per share in the first quarter, US Insider reported. The Amazon agreement gives that growth story multi-year visibility into the company's commercial and industrial segment.

For Generac, the agreement gives the company multi-year visibility into revenue from its commercial and industrial segment. The initial $2.4 billion delivery program for 2027 and 2028 sets a near-term floor, while the $8 billion ceiling leaves room for the relationship to grow well beyond that if Amazon keeps expanding its data center footprint. The Generac Amazon deal is disclosed as Amazon continues building out the data centers the generators will serve, and the first deliveries under the agreement are due in 2027.