Fred Alger Management, an investment management company, released its “Alger Mid Cap Growth Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The letter highlighted the market outlook and top-performing and underperforming stocks. Equity markets continued their upward rally in the third quarter, with the S&P 500 Index up 8.12%. A confluence of improved economic conditions, strong corporate earnings, and anticipation of monetary easing drove the strong performance of the market in the quarter. The Class A shares of the fund outperformed the Russell Midcap Growth Index in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, Alger Mid Cap Growth Fund highlighted stocks such as Axon Enterprise, Inc. (NASDAQ:AXON). Axon Enterprise, Inc. (NASDAQ:AXON) manufactures conducted energy devices (CEDs) under the TASER brand. The one-month return of Axon Enterprise, Inc. (NASDAQ:AXON) was -16.91%, and its shares lost 7.02% of their value over the last 52 weeks. On November 13, 2025, Axon Enterprise, Inc. (NASDAQ:AXON) stock closed at $557.29 per share, with a market capitalization of $43.976 billion.
Alger Mid Cap Growth Fund stated the following regarding Axon Enterprise, Inc. (NASDAQ:AXON) in its third quarter 2025 investor letter:
“Axon Enterprise, Inc. (NASDAQ:AXON) is a leading provider of public safety technology spanning TASER conducted-energy devices, body-worn and in-car cameras, and cloud software that manages digital evidence and incident workflows for law-enforcement agencies. The company serves the vast majority of U.S. departments (≈18,000 agencies) and is broadening adoption globally as customers standardize on its integrated hardware-plus-software platform (e.g., TASER 10, Body 4, and Axon Cloud/Evidence.com). We believe Axon’s installed base, recurring software mix, and rapid product cadence create a durable, compounding model with multiple avenues for growth: (1) continued refresh cycles in TASER and sensors; (2) expanding cloud subscriptions embedded in agency workflows; and (3) increasing contribution from AI-enabled features that improve report accuracy, reduce time spent on paperwork, and elevate operational efficiency. Despite delivering better-than-expected fiscal second-quarter earnings, shares detracted from performance as strong year-to-date gains and a premium valuation left the stock vulnerable to profit-taking. The pressure intensified in late September when Axon announced plans to acquire an AI-powered 911 communications platform, prompting concerns about expense intensity and near-term spending. While the stock experienced a short-term pullback, we continue to view Axon favorably, showcasing enterprise AI in action with publicly disclosed time-savings data. Management commentary and robust bookings further reinforce our conviction in the company’s AI-driven cloud momentum and long-term growth outlook.”
Axon Enterprise, Inc. (NASDAQ:AXON) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 62 hedge fund portfolios held Axon Enterprise, Inc. (NASDAQ:AXON) at the end of the second quarter, which was 61 in the previous quarter. In the third quarter, Axon Enterprise, Inc. (NASDAQ:AXON) generated $711 million in revenue, representing a 31% increase year-over-year. While we acknowledge the risk and potential of Axon Enterprise, Inc. (NASDAQ: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 Enterprise, Inc. (NASDAQ:AXON) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Axon Enterprise, Inc. (NASDAQ:AXON) and shared the list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
