Amazon secured warrants to buy up to 1.69 million Generac shares at $200.93 each, a potential $340 million investment that sent the generator maker's stock up more than 40 percent in Wednesday's extended session. The warrants represent roughly 3 percent of Generac's outstanding shares, which valued the company at about $10.3 billion at Wednesday's close.
The supply agreement behind the warrants
Generac will provide backup power generators for Amazon's data centers under a contract calling for $2.4 billion of deliveries across 2027 and 2028. About 308,000 warrant shares vested immediately, with the remaining tranches tied to payments for those generators. If fully exercised, the warrants could give Amazon an $8 billion stake in the Wisconsin-based company.
A familiar pattern for Amazon infrastructure deals
The arrangement follows a template Amazon has used repeatedly: secure supply from a critical vendor while taking an equity-like position through warrants. Last week the company struck a similar agreement with Qualcomm, obtaining warrants for up to $4 billion of stock alongside a custom AI chip supply deal. Previous warrant positions include stakes in Astera Labs, ATSG, Plug Power and SpartanNash.
The data center build-out driving demand
Amazon Web Services has been expanding data center capacity aggressively to meet compute demand from the artificial intelligence boom. The cloud unit signed a $38 billion deal with OpenAI last November and opened an $11 billion campus for Anthropic in October. Generac's generators sit at the physical layer of that build-out, backup power for facilities that cannot afford downtime.