Generac Holdings Inc. GNRC has entered into a major long-term supply agreement with Amazon AMZN, significantly strengthening its position in the rapidly expanding data center infrastructure market. Shares are up 34.5% in premarket trading today.
In a regulatory filing, Generac disclosed that it will supply backup power generators for Amazon data centers, with initial deliveries expected to total $2.4 billion across 2027 and 2028. Generac also issued Amazon.com NV Investment Holdings LLC a warrant to acquire up to 1,693,745 shares of its common stock at an exercise price of $200.9266 per share. Amazon.com NV Investment Holdings LLC is a wholly owned subsidiary of Amazon.
Of the total warrant shares, 307,954 vested immediately. Generac added that the remaining warrant shares will vest in tranches contingent upon aggregate gross payments, net of certain offsets, received by Generac and its affiliates from or on behalf of Amazon and its affiliates for backup power generators, extending up to a total of $8 billion of qualifying payments.
The Amazon agreement adds considerable scale and visibility to a data center business that is fast emerging as Generac's key growth engine.
In the second quarter of 2026, the company generated more than $100 million in data center revenues, helping drive a 29% year-over-year increase in Commercial & Industrial segment sales during the quarter. It also secured two multi-year agreements with hyperscale customers.
On the last earnings call, Generac noted that the data center backlog reached $1.6 billion as of July 2026, including roughly $1 billion of new orders received in the prior 90 days, while excluding expected orders from the second hyperscale agreement.
The company is focused on capacity expansion for large megawatt generators to support accelerating demand. Generac is ramping production at existing domestic and international facilities and accelerating the outfitting of its Sussex, WI, facility. Management also acquired the Belvidere, IL, packaging facility, which is expected to be operational in the first quarter of 2027. The Enercon buyout (completed earlier this year) is expected to boost Generac's vertical integration and support margin expansion for megawatt backup power offerings.