Amazon secured warrants to buy up to $340 million of Generac stock on Wednesday, a deal that also commits the backup-power maker to supply $2.4 billion of generators for Amazon data centers in 2027 and 2028. Generac shares rose more than 40 percent in extended trading after the company disclosed the arrangement in a securities filing.
The warrant mechanics
The warrants cover 1.69 million shares at $200.93 each, a total potential investment of $8 billion if fully exercised. About 308,000 shares vested immediately; the remaining tranches vest only as Amazon pays for generator deliveries. The warrants represent almost 3 percent of Generac’s outstanding shares, which carried a market capitalization of roughly $10.3 billion at Wednesday’s close.
The supply agreement
Generac will deliver backup generators to Amazon’s data centers under a schedule that anticipates $2.4 billion of revenue across 2027 and 2028. The filing ties further warrant vesting directly to those payments, aligning Amazon’s equity upside with Generac’s execution on the supply contract.
Pattern recognition
The structure mirrors Amazon’s playbook with strategic suppliers. Last week the company secured warrants for up to $4 billion of Qualcomm stock alongside a custom AI chip agreement. Previous warrant deals include Astera Labs, ATSG, Plug Power and Spartan Nash. In each case Amazon gains equity exposure to a vendor it is simultaneously scaling with procurement commitments.
What to watch
The $8 billion warrant ceiling dwarfs Generac’s current market value, embedding a call option on the company’s ability to convert the Amazon relationship into sustained, profitable volume. Investors are pricing the generator contract as a franchise-defining win. The test comes in 2027 when deliveries begin and vesting accelerates, or stalls.