Selling power and "giving stock": Generac (GNRC.US) secures a $2.4 billion generator order from Amazon.com, Inc., rising over 35% after hours

Amazon.com, Inc. (AMZN.US) received warrants to purchase up to $340 million worth of stock in backup power provider Generac (GNRC.US), sending the company's shares surging more than 35% in after-hours trading on Wednesday. As part of the agreement, Generac said in a securities filing that it issued warrants to Amazon.com, Inc. that allow the latter to acquire up to 1.69 million shares at $200.93 per share, with the total investment amounting to as much as $8 billion. The filing said Generac will supply backup generators for Amazon.com, Inc.'s data centers, with initial deliveries expected in 2027 and 2028, totaling $2.4 billion. About 308,000 warrant shares vested immediately, with the remaining tranches vesting based on generator payments. Based on Wednesday's close, the warrants represent nearly 3% of Generac's outstanding shares. The company has a market value of about $10.3 billion. This marks Amazon.com, Inc.'s latest infrastructure deal. Last week, Amazon.com, Inc. reached an agreement with Qualcomm to use its custom AI chips and received warrants to acquire up to $4 billion worth of Qualcomm stock. As a leader in cloud infrastructure, Amazon.com, Inc. Web Services (AWS) has been rapidly expanding data center capacity to meet the surge in computing demand related to the AI boom. Last November, it signed a $38 billion cloud services agreement with OpenAI; last October, it opened a $11 billion large campus for Anthropic. Amazon.com, Inc. frequently purchases warrants and takes equity stakes in its suppliers, including semiconductor company Astera Labs, air cargo contractor ATSG, green hydrogen supplier Plug Power, and grocery distributor Spartan Nash.