Key Highlights
- Shares of Generac soared 35% during premarket hours Thursday following the disclosure of a major generator supply contract with Amazon
- The agreement includes initial deliveries worth $2.4 billion scheduled for 2027 and 2028
- Amazon receives an equity warrant to purchase up to 1.69 million GNRC shares priced at approximately $201 per share
- Amazon has been identified as Generac’s second hyperscale data center client
- Following the news, Barclays maintained its Equalweight stance with a $278 price objective
Generac (GNRC) shares skyrocketed 35% in premarket activity Thursday after the power equipment manufacturer revealed a multi-year supply contract with Amazon to provide backup generators for its data center operations. Trading at approximately $235 before market open, the stock was positioned roughly 72% higher than its 2025 closing level of $136.37.
Under the terms of the agreement, Generac will supply generators worth $2.4 billion during the initial phase, with shipments scheduled throughout 2027 and 2028. This translates to approximately $1.2 billion annually, representing a substantial portion compared to Generac’s 2025 total revenue of $4.2 billion.
Details of the partnership emerged through a filing with the Securities and Exchange Commission released Wednesday night. The document confirms Amazon Data Services as the counterparty, which Generac had previously mentioned as its “second hyperscale customer” during July discussions without revealing the name.
The arrangement includes an equity warrant provision granting Amazon the option to acquire up to 1.69 million shares of GNRC stock at an approximate price of $201 per share. This stake would account for roughly 2.6% of the company’s fully diluted share count.
Approximately 308,000 shares under the warrant became exercisable immediately upon agreement execution. The remaining shares vest progressively as Amazon and related entities reach cumulative purchase thresholds on Generac generators, extending to a maximum of $8 billion. Complete vesting is scheduled through 2033.
Expanding Data Center Footprint
Generac’s presence in the data center market has been expanding significantly. During the second quarter of 2026, the company reported a 29% increase in commercial and industrial segment sales, while its data center order backlog had already reached approximately $1.6 billion prior to this Amazon announcement.
The partnership with Amazon extends internationally, encompassing data center facilities across multiple geographic regions beyond U.S. borders.
Regarding financial performance, Generac exceeded profit projections in Q2, delivering adjusted earnings of $2.91 per share compared to analyst expectations of $2.00. Revenue totaled $1.17 billion, marginally under the anticipated $1.18 billion. A tariff-related refund provided a boost to the earnings figure.
Wall Street’s Response
Barclays maintained its Equalweight recommendation on GNRC following the contract disclosure, keeping its price objective unchanged at $278.
Cantor Fitzgerald adopted a more optimistic position, increasing its price target to $333 and citing robust data center segment momentum as justification.
Needham reaffirmed its Buy recommendation with a $282 price target. The firm noted that the tariff refund played a role in driving the impressive Q2 performance.
GNRC finished 2025 at $136.37 and had climbed approximately 28% through Wednesday’s regular trading session before the after-hours announcement. The shares had touched a 52-week peak of $296.44 on June 25 before declining roughly 41% leading up to Tuesday.
According to InvestingPro’s assessment, GNRC appears to be trading beneath its Fair Value calculation, with shares carrying a P/E ratio of 39.97 and a market capitalization of $10.33 billion.
Barclays’ $278 price target following the deal disclosure represents a more conservative outlook when compared to Cantor Fitzgerald’s $333 projection.
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