US Stock Market Move | Generac (GNRC.US) rises nearly 35% in premarket trading; Amazon.com, Inc. large generator order wins analyst favor

Thursday premarket, backup power provider Generac (GNRC.US) rose 34.5% to $235.55. The company previously disclosed it will supply backup generator sets for Amazon.com, Inc.'s (AMZN.US) data centers, with initial deliveries expected in 2027 and 2028, totaling $2.4 billion. The agreement could ultimately generate up to $8 billion in revenue for Generac and its affiliates. As part of the deal, Generac issued warrants to a subsidiary of Amazon.com, Inc., allowing it to purchase up to 1.69 million Generac shares at an exercise price of $200.9266 per share. Analysts broadly welcomed the scale of the agreement and its potential impact. Barclays analyst Christine Cho rated Generac "Hold" with a $278 price target. She said the announcement follows Generac's July announcement of a supply agreement with a second hyperscale data center operator. She added that "the scale of the agreement exceeded expectations and validates the goal of tripling capacity mentioned on the last earnings call." Bloomberg Intelligence analyst Christina Feehery said Generac's long-term contract with Amazon.com, Inc. "has significant upside potential for earnings growth, and our calculations indicate the deal could make 2027 earnings per share 15% higher than expected." She added that while Generac issued warrants to Amazon.com, Inc. under the agreement, "if delivery amounts exceed $1 billion next year, the benefits to results should outweigh the equity dilution from the warrants." JPMorgan analyst Mark Strouse rated Generac "Overweight" and called the deal's "scale encouraging." He said: "As the backlog materializes, we expect Generac to continue expanding capacity to support fiscal 2027 deliveries."