Generac Holdings shares jumped after the generator maker signed a deal worth up to $8 billion to supply backup power for Amazon's data centers. Amazon also received warrants to buy Generac stock, and the two companies detailed initial deliveries worth $2.4 billion for 2027 and 2028.
Generac Holdings shares surged more than 30% late Wednesday after the generator maker signed a deal worth up to $8 billion with Amazon.com to supply backup-power generators for its data centers. In extended trading, shares of the backup-power provider climbed more than 40%, CNBC reported, after Amazon was granted warrants to purchase up to $340 million worth of Generac stock as part of the agreement.
Amazon's warrants and the filing terms
The company said in a securities filing that it issued warrants for Amazon to acquire up to 1.69 million shares at $200.93 apiece, a total investment that could reach $8 billion. About 308,000 warrant shares vested immediately, while the remaining tranches vest as Amazon pays for the generators. The warrants amount to almost 3% of outstanding shares in Generac, which had a market cap of about $10.3 billion as of Wednesday's close.
First deliveries worth $2.4 billion
Generac's deal includes initial deliveries of backup-power generators worth $2.4 billion in 2027 and 2028, the company said in its late Wednesday filing. The agreement also gives an Amazon subsidiary the right to buy Generac shares through 2033.
Part of a broader Amazon pattern
This agreement follows a similar move last week, when Amazon struck a deal with Qualcomm that included warrants to acquire up to $4 billion in Qualcomm stock tied to the use of Qualcomm's custom AI chips. Amazon Web Services has been rapidly building out data center capacity to meet a surge in compute demand tied to the artificial intelligence boom. It signed a $38 billion cloud deal with OpenAI last November. AWS also opened a sprawling $11 billion campus for Anthropic last October. Amazon also holds stakes in other suppliers, including semiconductor firm Astera Labs, air cargo contractor ATSG, hydrogen supplier Plug Power and grocery distributor Spartan Nash, according to CNBC.
Sources: MarketWatch, CNBC
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