Selling electricity and “giving shares”: Generac (GNRC.US) won Amazon's $2.4 billion generator order, up more than 35% after the market

The Zhitong Finance App learned that Amazon (AMZN.US) obtained warrants to purchase shares of backup power provider Generac (GNRC.US) worth up to US$340 million, driving the company's stock price to soar by more than 35% during Wednesday's after-hours trading.

As part of the agreement, Generac stated in a securities filing that the company issued warrants to Amazon, which could buy up to 1.69 million shares of the company at a price of $200.93 per share, with a total investment of up to $8 billion.

According to the filing, Generac will supply backup generator sets for Amazon's data centers, and the first deliveries are expected in 2027 and 2028, totaling US$2.4 billion.

Approximately 308,000 shares of the warrants were immediately vested, while the remaining instalments depended on the payment status of the generators.

By Wednesday's close, these warrants were equivalent to nearly 3% of Generac's issued shares, and the company's market capitalization was approximately $10.3 billion.

This marks Amazon's latest infrastructure deal. Last week, Amazon reached an agreement with Qualcomm to use its custom artificial intelligence chip and obtain warrants to buy up to $40 billion in Qualcomm shares.

As a leader in cloud infrastructure, Amazon Web Services (AWS) has been rapidly expanding data center capacity to meet the surge in computing power demand associated with the AI boom. Last November, it signed a $38 billion cloud services agreement with OpenAI; in October of last year, it opened a massive $11 billion campus for Anthropic.

Amazon often buys warrants and takes shares in its suppliers, including semiconductor company Astera Labs, air cargo contractor ATSG, green hydrogen supplier Plug Power, and grocery distributor Spartan Nash.