Generac Holdings shares exploded higher this week after the backup-power giant struck an $8 billion supply agreement with Amazon, one of the most dramatic single-day stock moves the generator maker has ever seen.

Under a Transaction Agreement dated Sept. 16, Generac issued Amazon a warrant to acquire up to 1,693,745 shares of common stock at an exercise price of $200.9266 per share, according to the company's 8-K filing with the Securities and Exchange Commission. Of those shares, 307,954 vested immediately, with the rest tied to Amazon hitting escalating purchase thresholds that could total $8 billion over the life of the deal.

A Bet on AI's Power Hunger

Initial deliveries under the pact total $2.4 billion across 2027 and 2028, with Amazon locking in Generac-built backup generators to keep its data centers running as artificial intelligence workloads strain power grids nationwide. CNBC reported that Amazon's initial warrant stake is worth roughly $340 million, a right it can exercise as the partnership scales.

Generac stock surged more than 27% on the news, with shares trading as high as $223.23 and extended-hours gains pushing past 40% at one point, according to Benzinga's market tracking. Analysts said the move reprices Generac's growth story entirely, shifting it from a residential-storm-backup name to a critical infrastructure supplier for the AI boom.

GENERAC'S BEST SINGLE SESSION ON RECORD.

Part of a Bigger Trend

The arrangement mirrors a pattern taking hold across the power sector, where tech giants racing to secure electricity for AI data centers are striking warrant-linked deals with equipment makers rather than simple purchase contracts — giving the buyer skin in the game and the supplier a guaranteed customer for years of output. Amazon has pursued similar structures with other energy suppliers as it builds out data center capacity to support its cloud and AI ambitions.

For Generac, long known for home standby generators sold during hurricane season, the Amazon deal represents a pivot toward industrial-scale contracts that could reshape its revenue base for years. Wall Street will be watching the company's next earnings report for guidance on how quickly the Amazon deliveries ramp, and whether other hyperscalers follow with warrant deals of their own.