Amazon's data center power deal sends Generac shares soaring
Amazon has secured warrants to purchase up to $340 million in Generac stock as part of an agreement for backup power generators for its data centers. The announcement triggered a more than 40% surge in Generac's share price during extended trading. The warrants allow Amazon to acquire up to 1.69 million shares at $200.93 each, with a potential total value of $8 billion.
The agreement includes warrants for 1.69 million Generac shares at $200.93 each, with roughly 308,000 vesting immediately and the rest tied to generator payments. Initial deliveries are slated for 2027 and 2028, valued at $2.4 billion. Generac’s market capitalization stands near $10.3 billion, making the warrants equivalent to about 3% of outstanding shares. Amazon has a pattern of taking equity stakes in suppliers, including Astera Labs, ATSG, Plug Power, and Spartan Nash, and recently secured warrants for up to $4 billion in Qualcomm stock as part of a custom AI chip deal.
This deal could signal deeper interdependence between hyperscale cloud providers and energy infrastructure firms. As AI data centers demand reliable power, Amazon’s warrant structure may encourage other tech giants to secure backup generation through similar equity-linked contracts. Generac’s shareholders benefit from a potential capital infusion, but the arrangement also ties the company’s fortunes to Amazon’s data center buildout. Smaller suppliers might face pressure to accept such terms, potentially reshaping how critical infrastructure is financed and controlled.