Generac CEO says 5G rollout increases demand for backup power generation

Generac CEO Aaron Jagdfeld told CNBC Monday that the backup power generator company expects to benefit from the adoption of 5G wireless technology.

“We think that that’s a space that is going to grow tremendously over the next five years,” he said in an interview with Jim Cramer on “Mad Money.“

For Generac, the opportunity particularly lies in the telecommunications arena. The company is already a top provider of backup generation for major wireless providers, Jagdfeld said.

The rollout of 5G technology, or fifth-generation mobile network, promises to bring faster network speeds and connect more activities to the internet of things. The way people learn, drive and take care of their health are all expected to be impacted by the new technologies.

Because the networks will become even more critical to society, Jagdfeld said demand for power security will only increase.

“None of it works without a continuous source of power and what the telecom companies are going to have to do is they’re really going to have to up their game in terms of reliability, and that’s where we come in,” he said.

Shares of Generac fell more than 2% in Monday’s session to close at $293.95. The stock is up almost 30% year to date.