Amazon Secures Rights to Buy $340M in Generac Stock Amid Data Center Power Deal

Amazon has secured equity warrants allowing it to purchase up to $340 million worth of stock in backup power manufacturer Generac, driving the generator maker's share price up by more than 40% in late trading on Wednesday.

A regulatory filing detailing the arrangement shows that Generac issued warrants to the tech conglomerate to acquire up to 1.69 million shares at an exercise price of $200.93 per share. The broader partnership could represent an overall financial impact of as much as $8 billion, as first reported by CNBC Business.

Under the commercial contract, Generac will supply Amazon with backup electrical generators designed to support its cloud data center facilities. Initial hardware deliveries under the contract are expected to total $2.4 billion across 2027 and 2028.

The vesting structure ties Amazon's equity rights directly to hardware spending milestones. Approximately 308,000 warrant shares vested immediately upon signing, while the remaining tranches are scheduled to vest in stages linked to ongoing generator payments.

The total warrant allocation represents roughly 3% of Generac's total shares outstanding. Generac held a market capitalization of approximately $10.3 billion at the close of regular market hours on Wednesday prior to the announcement.

The transaction underscores the expanding energy needs of major cloud operators, who are racing to guarantee power availability and grid redundancy for high-density computer infrastructure.

The agreement follows a similar structured deal executed by Amazon just last week. In that transaction, the cloud giant partnered with Qualcomm to deploy specialized artificial intelligence processors while obtaining warrants to purchase up to $4 billion in Qualcomm equity.