Key Stats for Generac Stock
- Price Change for Generac stock: 1.42%
- $GNRC Share Price as of Dec. 19: $139
- 52-Week High: $203
- $GNRC Stock Price Target: $206
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What Happened?
Generac (GNRC) stock jumped 1.4% on Friday after Wells Fargo upgraded the power generator maker to “Overweight” from “Equal Weight, citing massive growth potential in the artificial intelligence data center market. The firm raised its price target to $195, implying upside of over 40% from current levels.
The upgrade comes after Generac stock fell nearly 28% following disappointing third-quarter results posted on October 29.
The company reported a 5% decline in sales to $1.11 billion, hurt by the weakest power outage environment since 2015.
Lower demand for home standby and portable generators weighed on residential sales, which dropped 13% year-over-year.
The firm values Generac’s base business at $133 per share and sees the data center opportunity adding another $61 per share. That means the current stock price is pricing in just $4 per share of value from data centers, despite a backlog that has doubled to over $300 million in the last 90 days.
Management revealed that most of this backlog is expected to ship in 2026, providing meaningful momentum for commercial and industrial product sales next year.
The company is also exploring aggressive capacity expansion to meet surging demand for large megawatt generators used in data centers, with potential capital investments planned in the fourth quarter.
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What the Market Is Telling Us About Generac Stock
The rally in Generac stock suggests investors are starting to recognize the long-term opportunity in AI-driven power demand.
Wells Fargo estimates the total addressable market for diesel generators in data centers at $12 billion annually.
If Generac captures just 10% of that market, it could add significant value beyond what’s currently reflected in the share price.
The firm believes the market is undervaluing this growth driver, estimating that Generac could average $1.2 billion in data center revenue over the next five years compared to the roughly $300 million currently priced in by the market.
Management echoed this optimism on the earnings call, describing the data center opportunity as “generational” and committing to aggressive investments to scale capacity.
While residential generator sales face headwinds from weak outage activity, the company expects a rebound in 2026 as power outage patterns return to historical norms.
Combined with the data center tailwind, Generac stock could be positioned for a strong recovery despite near-term challenges.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
