Plug Power stock skyrocketed by more than 73% to close at $2.25 on Wednesday and then continued climbing in extended trading. It seems Amazon is not only the hydrogen fuel cell system maker’s newest customer but may also buy a stake in it.

Plug Power
Image Credit: Plug Power / YouTube video screenshot

Volumes were heavy in Plug Power shares, as more than 135.7 million shares changed hands on Wednesday versus the average daily volume of 6.15 million shares.

Plug Power reveals supply deal with Amazon

Plug Power management announced today that they have struck a deal with Amazon that could be valued at as much as $600 million. The online retailer agreed to use the company’s hydrogen fuel cells and technology within its fulfillment infrastructure. In some of its warehousing locations, it will install and use the GenKey hydrogen fuel cell systems developed by Plug Power. It means some of Amazon’s forklifts and other industrial warehouse equipment will run on hydrogen fuel cells.

Instead of shelling out cash up front for the hydrogen fuel cell systems, the online retailer is expected to make aggregate payments in goods and services that could reach as high as $600 million. Keep in mind that Plug Power only recorded $85.9 million in revenue in all of last year.

Amazon to spend $70m with Plug Power in 2017

This year, Amazon plans to equip the forklifts with hydrogen fuel cells made by Plug at 11 of its warehouses. The fuel cells should enable the lift trucks to charge more quickly and also run longer before they require charging, Plug CEO Andy Marsh told Reuters. The online retailer expects to spend $70 million with his firm this year and probably double that amount next year, he added.

Although the company isn’t getting an immediate influx in cash, this is certainly a huge win. Amazon has been growing its logistics and warehouse infrastructure rapidly, making it arguably an even bigger win than the company’s other customer wins over the last few years. Walmart is one of several big wins Plug Power has announced in recent years, but Amazon’s rapid growth and its goal of continuing to expand its infrastructure will make it an invaluable customer over time.

Amazon granted warrants to buy Plug Power shares

As part of the supply deal, the company has granted Amazon warrants to purchase 55.3 million shares, with the exercise price set at $1.1893 a share. Those warrants will vest according to the amount of money the online retailer spends purchasing services or products from Plug Power. According to MarketWatch, as of the end of December, there were 180.6 million outstanding shares of the hydrogen fuel cell system company.