Axon Enterprise (AXON): A Bull Case Theory

We came across a bullish thesis on Axon Enterprise on Compounding Your Wealth’s Substack by Sergey. As of 9ᵗʰ July, Axon Enterprise’s share was trading at $805.86. AXON’s trailing and forward P/E were 196.07 and 129.98 respectively according to Yahoo Finance.

Jim Cramer Notes Axon (AXON) is a “New High Natural”

A technician in a white coat testing an in-car system on a modern military vehicle.

Axon Enterprise, a public safety technology company, has evolved from a conducted energy weapons manufacturer into a comprehensive public safety ecosystem provider. The company operates through two primary segments: Software and Sensors, and TASER devices. Axon’s mission is to ‘Protect Life’ and aims to create a world where bullets are obsolete. With a strong brand recognition and a wide economic moat, Axon maintains a significant competitive advantage in the public safety technology market. The company’s total addressable market has expanded to $129 billion in 2025, driven by AI integration, product innovation, and growth into new verticals.

Axon’s recent performance shows strong revenue growth, with a 31% YoY increase in Q1 2025. The company’s Software & Services segment grew 39% YoY, driven by the adoption of AI-powered solutions and digital evidence management. Axon’s connected devices revenue reached $341 million, up 26% YoY, driven by strong performance across TASER10, Axon Body4, and other products. The company’s ARR (Annual Recurring Revenue) reached $1.104 billion, growing 34% YoY, and the retention rate remains high at 123%.

Despite the strong growth, Axon’s valuation appears high, with a Forward EV/Sales multiple of 21.81 and a Forward P/E of 125.0. However, the company’s growth prospects, expanding total addressable market, and strong competitive advantages justify its premium valuation. Axon’s innovative products, strategic acquisitions, and partnerships are expected to drive future growth. The company’s commitment to innovation and its mission-driven approach are expected to sustain its long-term growth and create a significant impact in the public safety technology sector.

Previously, we covered a bullish thesis on Axon Enterprise by Hidden Market Gems in June 2025, which highlighted strategically broadening its market presence by deeply integrating artificial intelligence (AI) across its suite of products. The company’s stock price has appreciated by 7.5% roughly. Sergey’s view shares a similar bullish stance but emphasizes different aspects of the company’s growth potential.

Axon Enterprise is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 61 hedge fund portfolios held AXON at the end of first quarter which was 64 in the previous quarter. While we acknowledge the risk and potential of AXON as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AXON and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.