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Generac Stock Surges 18% on $8 Billion Supply Agreement with Amazon
Generac Holdings (NYSE:GNRC) shares surged 18% in after-hours trading Thursday following the announcement of a multi-billion dollar, long-term supply agreement with Amazon.com (NASDAQ:AMZN). The deal positions Generac as a key supplier of backup power generators for the tech giant's critical data center infrastructure.
Details of the Agreement
Under the terms of the deal, Generac will supply Amazon with backup power generators, with potential payments totaling up to $8 billion. The company disclosed that initial deliveries are slated for 2027 and 2028 and are expected to be worth a combined $2.4 billion.
This agreement provides a significant and predictable long-term revenue stream for Generac. For investors, it represents a major endorsement of the company's technology by one of the world's largest cloud computing providers, a sector where power reliability is paramount.
AdAmazon Receives Stock Warrant
As part of the transaction, Generac issued a warrant to Amazon.com NV Investment Holdings LLC, a wholly-owned subsidiary of Amazon. The warrant allows Amazon to acquire up to 1,693,745 shares of Generac's common stock at an exercise price of $200.93 per share.
According to the announcement, 307,954 of those shares vested immediately. The remainder of the warrant will vest in tranches, contingent upon Amazon reaching specific payment milestones for the backup power equipment, creating an incentive for the full execution of the supply contract.
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