Amazon Ordered $2.4 Billion of Backup Generators; Generac Rose 40%

Generac's filing with the securities regulator landed on Wednesday evening, after the U.S. market had closed.

The order line said $2.4 billion.

The stock rose more than 40% in after-hours trading.

The Filing Carries Two Separate Numbers

Generac signed a long-term supply agreement with Amazon on September 16. The product is backup generators — the machines that take over in Amazon's data centers when grid power drops.

The disclosed value is $2.4 billion. That figure covers the initial deliveries expected across 2027 and 2028.

On the same day, Generac issued a wholly owned Amazon subsidiary a warrant to buy 1,693,745 shares at $200.9266 each. It expires September 16, 2033.

Of that warrant, 307,954 shares vested at signing. The rest vests in tranches as Amazon's cumulative payments for generators climb toward $8 billion.

For years Generac's core business was the standby generator that keeps a house lit after a storm. The company's 2025 revenue was $4.21 billion.

The ceiling written into the filing is roughly twice that.

The Exercise Price Was Set Above the Market

Generac closed Wednesday at $175.11.

Amazon's exercise price is $200.93 — 14.7% above that close. At the moment of signing, the warrant was worth nothing on paper.

Once the filing was out, the stock rose more than 40% after hours, and by some accounts as much as 45%.

What made the warrant exercisable was the announcement the warrant was part of.

The Customer Earns the Discount It Creates

Amazon pays no cash for this right. It unlocks the right by buying generators.

An instrument like this — a fixed-price right to buy shares — is called a warrant. It grants a right, not an obligation to purchase. More: How Options Work

Generac's side of the payment is measured in shares: 1.69 million of them, against 59 million outstanding, or 2.9%. More: What Is Market Capitalization?

The Ceiling Is Bigger Than the Factory

When Generac reported second-quarter results on July 29, it put its data center backlog at roughly $1.6 billion. Data center revenue in the quarter topped $100 million, and the company expected close to $450 million for all of 2026.

On the same call it gave a capacity figure. The year-end generator capacity target is $1.25 billion, and management said it had a path to triple that. The bottleneck is generator assembly and packaging.

Amazon's initial deliveries are spread over two years: roughly $1.2 billion a year.

One customer would fill nearly the whole of the company's current capacity target. The $8 billion ceiling describes a production line that does not exist yet.

The Third Time in Four Weeks

Two of the three deals were struck with chip companies. The third is with a maker of diesel generators.

Amazon has used the structure before; press accounts list Astera Labs, ATSG, Plug Power and SpartanNash among suppliers whose stock it holds rights to. What sets the Qualcomm and Generac agreements apart is that the size of the right is tied, step by step, to the amount purchased.

The three-month path shows the level the order arrived at.

The broad index over the same three months:

What Is Left

A backup generator is the part of a data center that runs when the grid fails. Its use is not limited to the outage, though: as grid connection queues lengthen, a building that can make its own power opens sooner.

That is where Amazon's hurry sits. Generac's capacity sits in 2027.

The same power bottleneck governs revenue at names like Cummins and Bloom Energy. What this agreement does to them will show up in Thursday's session.

This article draws on Generac's 8-K filing dated September 16, the company's second-quarter results released July 29, and Bloomberg and CNBC reporting dated September 16. The after-hours price range is taken from press accounts rather than settled trade data. Amazon's stock rights in other suppliers also rest on press accounts.