Changes in US stocks | Generac (GNRC.US) rose nearly 35% before the market, Amazon's generator order was favored by analysts

The Zhitong Finance App learned that before the US stock market on Thursday, backup power provider Generac (GNRC.US) rose 34.5% to $235.55. Earlier, the company revealed that it will supply backup generator sets for Amazon (AMZN.US) data centers. The first batch is expected to be delivered in 2027 and 2028, totaling 2.4 billion US dollars. The agreement could eventually generate up to $8 billion in revenue for Generac and its affiliates.

As part of the deal, Generac issued warrants to the Amazon subsidiary, allowing it to purchase up to 1.69 million Generac shares at an exercise price of $200.9266 per share.

Analysts generally welcomed the size of the agreement and its potential impact.

Barclays analyst Christine Cho gave Generac a “holding” rating and a target price of $278. She said the announcement came after Generac announced in July that it had reached a supply agreement with a second hyperscale data center operator. She added, “The scale of the agreement exceeded expectations and confirmed the target of tripling production capacity mentioned in the last earnings call.”

Bloomberg Intelligence analyst Christina Feehery said that Generac's long-term contract with Amazon “has significant room for profit growth. Our calculations suggest that the transaction may increase earnings per share by 15% compared to expectations in 2027.” She added that although Generac issued warrants to Amazon under the agreement, “if the delivery amount exceeds $1 billion next year, the benefits to performance should outweigh the equity dilution brought by the warrants.”

J.P. Morgan analyst Mark Strouse gave Generac an “additional” rating and called the deal “encouraging in scale.” “As the backlog of orders is implemented, we look forward to Generac continuing to expand production capacity to support delivery in the 2027 fiscal year,” he said.