Data Center Boom Accelerates Generac's C&I Expansion Strategy With New Manufacturing Plant

Generac Holdings Inc. (GNRC) is capitalizing on the explosive growth of data center infrastructure by scaling its Commercial & Industrial (C&I) manufacturing capacity. The company has secured a new manufacturing plant in Sussex, Wisconsin, as part of a broader infrastructure investment that includes facilities in Beaver Dam and Oshkosh. This strategic expansion directly addresses surging demand for large-megawatt backup power generators—a market segment projected to experience transformative growth as global data center capacity is expected to more than triple by 2030.

The Data Center Opportunity Driving C&I Growth

The company’s pivot toward large-megawatt generators has unlocked unprecedented opportunities in the data center sector. Following the expansion of its product portfolio, Generac witnessed demand indicators nearly doubling its order backlog, a milestone disclosed during third-quarter earnings discussions. The Sussex manufacturing plant operation commencing in Q4 2026 will generate over 100 manufacturing positions and strengthen the company’s ability to fulfill this accelerating pipeline.

Third-quarter 2025 results underscore the momentum: C&I revenues reached $358 million, representing a 9% year-over-year increase. This growth stemmed from heightened shipments to industrial distributors, telecom providers, and notably, the initial overseas shipments to Australian data center operators. International sales climbed 11% during the same period, with domestic large-megawatt generator shipments commencing in October and the substantial majority of the existing backlog slated for 2026 delivery. Management projects mid-single-digit C&I sales expansion throughout 2025.

Multi-Year Growth Potential and Global Footprint

The company’s international infrastructure—spanning nine manufacturing facilities across Mexico, Europe, Asia, and South America—positions it advantageously to serve both traditional and emerging markets. Established backup power verticals including healthcare, hospitality, water treatment utilities, and heavy industrial operations continue to rely on Generac’s solutions. However, the transformational opportunity lies in data center penetration, where the company’s management suggests the potential to effectively double C&I revenues over a three-to-five-year horizon.

Stock Performance and Investment Profile

GNRC maintains a Zacks Rank #3 (Hold) designation. The stock has declined 7.7% over the trailing 12 months, underperforming its Manufacturing - General Industrial sector peer group, which appreciated 12.5% during the same window. Broader technology and industrial equipment manufacturers like Watts Water Technologies (WTS), Trimble Inc. (TRMB), and Nordson Corporation (NDSN)—each carrying a Zacks Rank of 2 (Buy)—have demonstrated stronger share price trajectories, with WTS surging 41.8%, NDSN advancing 21.5%, and TRMB gaining 10% annually.

The manufacturing plant expansion initiative underscores management’s conviction in sustained C&I sector expansion, positioning Generac to capitalize on infrastructure-driven power demand for years ahead.