Amazon delivers

Generac Holdings US Equity Research Sustainability 16 September 2026

Rating Price Target George Gianarikas | Analyst | Canaccord Genuity LLC (US) | | BUY US$375.00↑ Matt Paciulli | Associate | Canaccord Genuity LLC (US) | | unchanged from US$275.00 Jason Tilchen, CFA | Analyst | Canaccord Genuity LLC (US) | |

Price GNRC-NYSE US$175.11 Amazon delivers Investment Recommendation Market Data 52-Week Range (US$) : "In late June, we officially signed our second hyperscale supply agreement, and we Avg Daily Vol (M) : 1.0 are now in the final stages of negotiations with this customer on terms, conditions, Market Cap (US$M) : 10,330.0 volumes, and timelines for 2027 and 2028 deliveries." - Aaron Jagdfeld, CEO - 2Q26 Shares Out. (M) : 59.6 earnings call FYE Dec 2025A 2026E 2027E 2028E Sales (US$M) 4,209 4,940 6,724↑ 8,125↑ And today was the official announcement. Previous - - 5,733 6,670 EPS Adj ↑ 17.05↑ Generac has locked in a landmark, multi-year supply agreement to power Amazon's (US$) expanding data center infrastructure, unlocking up to $8B in total potential order Previous - - 10.44 13.54 volume with initial deliveries projected at $2.4 billion across 2027 and 2028 (we 320 believe heavily anchored by firm backlog in those 2 years). Under this strategic 300 arrangement, Generac will supply custom backup power generators tailored 280 specifically to Amazon's demands, while issuing an Amazon subsidiary a warrant to 260 purchase up to 1,693,745 shares of common stock at an exercise price of $ per share. 220 Management’s Amazon announcement serves as a strong endorsement of Generac’s 200 ability to establish a competitive foothold in this nascent subsegment. To capture this 180 “generational” wave, management is sprinting at breakneck speed to triple capacity 160 by Emerging pushback from skeptics is obvious: what if the AI infrastructure boom

Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 Jan-26 Feb-26 Mar-26 Apr-26 May-26 Jun-26 Jul-26 falters? Having highlighted those exact risks for over 2 years in our work, we respect the concern. Quite a bit. GNRC.US Russell 2000 (rebased) Source: FactSet However, we find it encouraging that the substantial portion of 2027 and 2028 deliveries are secured by what we believe is firm backlog. Priced as of close of business 29 July 2026 In our view, Generac is taking a deliberate, long-term approach to hyperscaler Generac produces generators and other engine- demand—balancing ambition with prudence. While many may rush blindly toward powered products for residential, light commercial, the next bright shininess, Generac is building with intention—buying land rather industrial and commercial end markets. than leasing it, keeping its capital expenditures disciplined (albeit rising) in the modest mid-single digits. Capacity is expanding fast at Generac, but we estimate management has maintained flexibility.

The fundamentals driving the long-term residential segment growth are real. Generac sees it in the living rooms of America: even in a quiet storm season, families are calling (see IHC trends from 2Q26). The long-term truth is simple, in our opinion. The weather isn't getting gentler, and the grid isn't getting stronger. That builds a very real, very durable wind at this market's back.

Should severe weather return, Generac’s residential rebound could collide with an accelerating data center surge—creating a formidable one-two punch. Watch out.

We reiterate our BUY rating and raise our price target to $375 from $275 based on ~22x (from ~20x) our 2028E non-GAAP EPS estimate of $17.05 (from $13.54). The median 2028E EPS multiple in Generac’s comp group is currently ~19x. We feel that this slight premium to the comps is justified based on Generac's growing backlog and long-term growth potential.

Canaccord Genuity is the global capital markets group of Canaccord Genuity Group Inc. (CF : TSX) The recommendations and opinions expressed in this research report accurately reflect the research analyst's personal, independent and objective views about any and all the companies and securities that are the subject of this report discussed herein.

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