Generac stock jumps 40%: What’s behind the after-hours rally?

Generac Holdings shares surged more than 40% in after-hours trading on Wednesday after the company announced a major long-term agreement to supply backup generators to Amazon data centres. (Source: Reuters, Stocktwits/TradingView, AskTraders)

Generac will supply backup power generators for Amazon’s data-centre operations, with initial deliveries expected to total about $2.4 billion in 2027 and 2028.

The agreement could ultimately involve generator purchases worth up to $8 billion, significantly expanding the potential scale of Generac’s relationship with Amazon.

Generac issued an Amazon subsidiary a warrant to purchase up to 1.69 million GNRC shares at $200.9266 apiece. About 307,954 shares vested immediately, while the remaining shares are linked to future generator purchases.

The agreement highlights the growing need for reliable electricity and backup generation as Amazon expands data-centre infrastructure to support cloud computing and AI workloads. Generac had previously reported a $1.6 billion data-centre backlog.

Generac has been expanding its commercial and industrial business as data centres become a larger source of demand. The company had previously identified data-centre sales as a major long-term growth opportunity.

The Amazon agreement puts Generac at the intersection of AI, data centres and power infrastructure. Investors will now watch the pace of deliveries, future Amazon purchases and how quickly Generac converts the agreement into revenue.