Amazon has been granted warrants to buy up to 1.69 million shares of Generac at a price of $200.93 each, potentially totaling an investment of $8 billion. This agreement is part of a broader collaboration where Generac will supply Amazon with backup power generators for its data centers, with initial orders expected to reach $2.4 billion by 2027 and 2028.
Following the announcement, Generac's shares surged over 40% in after-hours trading, reflecting investor optimism about the deal. The warrants represent nearly 3% of Generac's outstanding shares, which have a market capitalization of approximately $10.3 billion.
This move aligns with Amazon's recent trend of securing warrants and investments in its suppliers, including a recent deal with Qualcomm for custom AI chips and warrants worth up to $4 billion in Qualcomm stock. Such strategic investments not only enhance Amazon's supply chain resilience but also position it favorably within the growing infrastructure market