Generac Strikes $8B Deal with Amazon to Supply Backup Generators for Data Centers

Generac Holdings has entered into a long-term agreement with Amazon to supply up to $8 billion worth of industrial backup generators for the technology giant's data centers, a deal that underscores the surging demand for reliable power infrastructure in the rapidly expanding data center sector.

The Waukesha, Wisconsin-based power generation company disclosed the agreement in a filing with the U.S. Securities and Exchange Commission on Wednesday. Under the terms of the deal, Generac is expected to deliver approximately $2.4 billion worth of generators to Amazon in 2027 and 2028, with the broader agreement carrying a total value of up to $8 billion over its duration.

The agreement also grants Amazon the right to acquire up to nearly 1.7 million shares of Generac stock at roughly $200 per share, according to the SEC filing. Amazon immediately received the right to purchase more than 300,000 shares, while the remaining shares will vest over time as Generac receives payments and fulfills its obligations to supply backup power generators under the agreement. Amazon spokespeople did not immediately respond to requests for comment.

Generac CEO Aaron Jagdfeld described the deal as a landmark achievement for the company, saying it establishes Generac as a "long-term partner for the supply of industrial backup generators to Amazon" and demonstrates the industry's growth. "It provides visibility to our multi-year growth expectations and our ongoing investments in vertically integrated large megawatt generator manufacturing capacity," Jagdfeld said in a statement. "This is a significant milestone for Generac and positions us to capture this generational growth opportunity."

The agreement represents a major validation of Generac's strategic pivot toward the data center market, which has become an increasingly important sales driver for the company in recent years. Amazon Web Services, the company's cloud computing arm, currently operates 287 data centers with an additional 200 planned across 22 countries, according to industry research tool Data Center Map, illustrating the enormous scale of infrastructure that requires backup power solutions.

News of the deal sent Generac's stock price surging on Wednesday from roughly $175 per share to nearly $250 per share, before settling at approximately $208 per share by noon Thursday. The market reaction reflects investor confidence in the company's positioning within the data center supply chain.

Generac's commercial and industrial segment has been growing rapidly, with net sales increasing 29 percent in the second quarter of this year to $556 million, compared to $431 million in the same period last year. "Sales growth for the segment was primarily driven by ramping revenue from products sold to the global data center market," said Generac Chief Financial Officer York Ragen during the company's second quarter earnings call in July.

During that call, Jagdfeld told investors the company expected to see nearly $450 million in data center-related revenue this year, up from previous projections. He also noted that Generac had a backlog of $1.6 billion worth of products sold to the data center market, not including a separate agreement with a large data center customer signed in June. "The significant growth in our data center backlog with both hyperscale and non-hyperscale customers provides further confidence in our ability to serve this massive and still rapidly growing market," Jagdfeld said.

To meet growing demand for industrial-scale generators, Generac has ramped up production at its existing manufacturing facilities and accelerated efforts to build a new plant in Sussex, Wisconsin. Jagdfeld said the Sussex facility is on track to begin production this year, ahead of the company's initial target. Generac employs more than 4,800 people across 11 locations in Wisconsin, including seven manufacturing facilities, according to a company spokesperson.

The deal with Amazon highlights the critical role that backup power infrastructure plays in the data center industry, where uninterrupted power supply is essential for maintaining uptime and meeting service-level agreements. As hyperscale operators continue to expand their footprints globally, demand for large-megawatt generators and other power reliability solutions is expected to grow substantially in the coming years.