Key Highlights

● Generac disclosed a long-term generator supply deal with Amazon.

● The deal was valued at about $2.4 billion for 2027-2028.

● Generac posted record third-quarter sales of $1.29 billion.

● The company also raised its margin outlook.

Generac Holdings (NYSE:GNRC) climbed on Wednesday, October 28, as it disclosed a new long-term agreement to supply backup generators for Amazon's (NASDAQ:AMZN) data centers, a deal that pushes the company deeper into the artificial intelligence infrastructure boom.

The stock rose solidly on the S&P 500, even though its quarterly sales came in slightly below expectations.

The Amazon Deal

Generac disclosed a long-term supply agreement with Amazon for data-center backup generators. Market reports valued the deal at about $2.4 billion, covering 2027 and 2028.

Data centers cannot afford to lose power, even for seconds. They rely on large standby generators to keep servers running if the grid fails. As AI facilities grow larger and consume more electricity, the need for reliable backup power grows with them. Landing Amazon, one of the world's biggest cloud operators, gives Generac a marquee customer and multiyear visibility in a market where it has been working to expand beyond its traditional home-generator business.

Record Sales, Mixed Against Estimates

Generac reported record third-quarter sales of $1.29 billion, according to market data, slightly below the $1.32 billion analysts had expected. Adjusted earnings of $2.54 a share beat the $2.43 consensus.

The company also raised its margin outlook, signaling it expects profitability to improve. A record quarter combined with a better margin view gave the results a constructive tone overall, even with the slight miss on the top line.

Power for AI

Generac's move reflected a broader theme: the AI build-out is as much about electricity as it is about chips. Vertiv Holdings (NYSE:VRT), which makes power and cooling systems for data centers, rocketed after reporting that orders more than doubled. Its chief executive, Giordano Albertazzi, said the company is in the middle of the largest infrastructure build-out and it is accelerating.

Melius Research's James West put it another way, describing AI compute as a natural gas demand story. Many backup generators run on natural gas or diesel, tying Generac directly to that energy theme.

What to Watch

Industrials were among the eight of 11 sectors that rose, while technology and energy led. The S&P 500 rose 21.38 points to 7,743.98, its third straight gain, and oil settled at $102.78 a barrel.

Amazon itself reports after the close on Thursday, and any comments on data-center construction and capital spending will be closely watched by Generac investors. Caterpillar (NYSE:CAT), a major supplier of power generation equipment, reports before the open, along with Mastercard (NYSE:MA) and Merck (NYSE:MRK).