What Happened?
Shares of power generation products company Generac (NYSE: GNRC) jumped 18.4% in the afternoon session after the company reached an agreement valued at up to $8 billion to supply Amazon with data center backup-power generators.
Under the supply agreement, Generac will provide Amazon with data center backup generators worth at least $2.4 billion for initial delivery in 2027 and 2028 per MorningStar. The deal also grants an Amazon subsidiary warrants to purchase up to 1.69 million Generac shares at an exercise price of $200.93 each through 2033. The warrants will vest in stages as cumulative generator payments from Amazon reach $8 billion.
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What Is The Market Telling Us
Generac’s shares are very volatile and have had 28 moves greater than 5% over the last year. But moves this big are rare even for Generac and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was about 1 month ago when the stock dropped 4% on the news that the latest industrial production report showed slower-than-expected growth for July. Data from the Federal Reserve indicated that U.S. industrial production rose by 0.2%, which was half of the 0.4% increase that analysts polled by The Wall Street Journal had anticipated. While this marked the second consecutive month of growth, it represented a slowdown from the previous month's revised figures. Manufacturing output also saw a modest 0.2% increase. This weaker-than-forecast data can raise concerns among investors about cooling economic activity and potentially softening demand for manufactured goods, which directly impacts the outlook for companies across the industrial sector.
Generac is up 47.2% since the beginning of the year, but at $207.76 per share, it is still trading 29.7% below its 52-week high of $295.54 from June 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Generac’s shares 5 years ago would now be looking at only $477.21.
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