Key facts
- Amazon and Generac have entered into an agreement for power equipment supply.
- Generac will supply $2.4 billion worth of generator equipment for Amazon's data centers.
- Amazon received warrants to purchase 1.69 million shares of Generac.
- Generac's stock surged as much as 33% on Thursday following the announcement.
- UBS analyst Jon Windham views the deal as a significant positive for Generac.
- Other power companies with AI links also saw stock increases, including GE Vernova, Bloom Energy, and Constellation Energy.
Amazon has entered into an agreement with Generac, a company known for home backup generators, to supply equipment for its data centers. The deal, which includes warrants for Amazon to purchase 1.69 million shares of Generac, sent the generator company's stock soaring as much as 33% on Thursday. The agreement is valued at $2.4 billion.
Matthew Tuttle, CEO of Tuttle Capital Management, noted that Generac's stock surge was for supplying generators, not chips, for data centers, calling it "this week's AI trade in a nutshell." Tuttle highlighted power delivery as a critical bottleneck for the AI infrastructure buildout that investors should not overlook.
Following Generac's significant move, shares of other power companies linked to AI infrastructure also saw gains, including GE Vernova, Bloom Energy, and Constellation Energy. UBS analyst Jon Windham described the deal as a "significant positive for GNRC," a company that had only recently announced its intent to enter the large data center market.