US Stock Movement | Generac (GNRC.US) jumps nearly 35% pre-market as Amazon generator order receives positive analyst outlook

According to Jinji Finance APP, before the U.S. stock market opened on Thursday, backup power provider Generac (GNRC.US) surged 34.5% to $235.55. Previously, the company disclosed that it would supply backup generators for Amazon's (AMZN.US) data centers, with the first 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 transaction, Generac issued warrants to an Amazon subsidiary, allowing it to purchase up to 1.69 million shares of Generac stock at an exercise price of $200.9266 per share.

Analysts have generally welcomed the scale of this agreement and its potential impact.

Barclays analyst Christine Cho gave Generac a "Hold" rating and a target price of $278. She said that this announcement followed Generac's announcement in July that it had reached a supply agreement with a second hyperscale data center operator. She added, "The scale of this agreement exceeded expectations and also confirms the goal, mentioned on the last earnings call, of tripling capacity."

Bloomberg Intelligence analyst Christina Feehery said that the long-term contract between Generac and Amazon "offers significant upside for earnings growth, and our calculations suggest the transaction could bring 2027 earnings-per-share 15% above expectations." She added that although Generac issued warrants to Amazon as part of the agreement, "if next year's deliveries exceed $1 billion, the benefits to performance should outweigh the equity dilution from the warrants."

JPMorgan analyst Mark Strouse gave Generac an "Overweight" rating and called the scale of the deal "encouraging." He said, "As the backlog is fulfilled, we look forward to Generac continuing to expand capacity to support deliveries for fiscal year 2027."