Generac Shares Surge Over 34% on Multi-Billion Dollar Amazon Data Center Deal

Shares of Generac Holdings Inc. (NYSE: GNRC) surged more than 34% in pre-market trading following the announcement of a landmark, long-term supply agreement with Amazon.com. The deal positions Generac as a key supplier for the tech giant's expanding data center operations.

Landmark Supply Agreement

The agreement calls for Generac to provide backup power generators for Amazon's data centers. According to the announcement, the contract is valued at up to $8 billion over its lifetime.

Initial deliveries are scheduled for 2027 and 2028, accounting for $2.4 billion of the total potential value. This contract marks a significant expansion for Generac, moving it from its traditional focus on residential and commercial units into the hyperscale data center market.

Ad

Strategic and Financial Impact

The Amazon deal underscores a major strategic pivot for Generac and reflects substantial growth in its data center business. The company's data center backlog had already surged to $1.6 billion, up from approximately $700 million in recent months, fueled by approximately $1 billion in new orders booked in the last 90 days.

This move into the hyperscale sector builds on recent operational strength. In its last quarter, Generac reported 29% growth in its commercial segment and an expansion of gross profit margins to 44.5%, providing a strong financial foundation for this large-scale expansion.