Quick Overview
- Generac shares skyrocketed 35% during Thursday’s premarket session following disclosure of a major generator contract with Amazon
- The agreement includes $2.4 billion worth of initial deliveries scheduled for 2027 and 2028
- As part of the arrangement, Amazon receives equity warrants for up to 1.69 million shares of GNRC priced around $201 per share
- Amazon represents Generac’s second confirmed hyperscale data center client
- Following the news, Barclays maintained its Equalweight stance with a $278 price objective
Shares of Generac (GNRC) surged 35% during premarket hours Thursday following the company’s announcement of a major supply contract with Amazon to provide backup power generators for its data center operations. Trading at approximately $235 before the opening bell, the stock represented a roughly 72% increase over Wednesday’s closing price of $136.37.
Under the terms of the arrangement, initial generator shipments are valued at $2.4 billion and will be delivered throughout 2027 and 2028. This translates to approximately $1.2 billion annually, representing a significant portion compared to Generac’s full-year 2025 revenue of $4.2 billion.
Details of the partnership emerged in a filing with the Securities and Exchange Commission late Wednesday. The document names Amazon Data Services as the customer, confirming it as the “second hyperscale customer” that Generac had previously mentioned in July without publicly identifying.
The deal’s structure includes an equity warrant provision granting Amazon the right to purchase up to 1.69 million shares of GNRC at approximately $201 per share. This stake represents roughly 2.6% of the company’s fully diluted share count.
Approximately 308,000 shares under the warrant arrangement vested at the time of signing. The remaining shares will vest progressively as Amazon and related entities reach cumulative purchase thresholds on Generac generators, with a maximum spending cap of $8 billion. Complete vesting is projected to occur by 2033.
Expanding Data Center Operations
Generac’s presence in the data center market has been expanding steadily. During the second quarter of 2026, the company reported a 29% increase in commercial and industrial sales, while its data center backlog stood at approximately $1.6 billion even before this latest Amazon announcement.
The partnership with Amazon extends worldwide, encompassing data center facilities in international markets beyond U.S. borders.
Regarding financial performance, Generac exceeded profit expectations in Q2, delivering adjusted earnings of $2.91 per share compared to analyst projections of $2.00. Revenue reached $1.17 billion, marginally below the anticipated $1.18 billion. The earnings outperformance was partially attributed to a tariff-related refund.
Wall Street’s Response
Barclays maintained its Equalweight recommendation on GNRC following the disclosure, keeping its price objective unchanged at $278.
Cantor Fitzgerald adopted a more bullish perspective, elevating its price target to $333 and citing robust data center segment performance as justification.
Needham reaffirmed its Buy recommendation with a $282 price target. The firm noted the tariff refund as a contributing element to the impressive Q2 performance.
GNRC finished 2025 at $136.37 and had climbed approximately 28% through Wednesday’s close prior to the after-hours announcement. The stock previously peaked at a 52-week high of $296.44 on June 25 before declining roughly 41% through Tuesday’s session.
According to InvestingPro’s evaluation, GNRC appears undervalued relative to its Fair Value calculation, with the stock trading at a P/E ratio of 39.97 and a market capitalization of $10.33 billion.
Barclays maintained its $278 price objective in the wake of the deal disclosure, representing a more conservative outlook when compared to Cantor Fitzgerald’s $333 projection.
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