Axon Enterprise, Inc. (AXON): A Bull Case Theory 

We came across a bullish thesis on Axon Enterprise, Inc. on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on AXON. Axon Enterprise, Inc.’s share was trading at $708.84 as of September 26th. AXON’s trailing and forward P/E were 174.59 and 83.33, respectively according to Yahoo Finance.

Axon Enterprise is evolving from a conducted energy weapons manufacturer into a full-stack public safety technology platform, integrating hardware, software, and AI-driven services to address the entire “call-to-closure” workflow. With high R&D investment sustaining innovation and strategic acquisitions such as Fusus, Dedrone, and Prepared, the company has expanded its ecosystem to cover real-time operations, airspace security, and AI-enhanced 911 responses. The total addressable market has surged to $129B in 2025, up from ~$50B in 2023, driven by international expansion, enterprise adoption, and new AI solutions, yet Axon has captured less than 2%, signaling a long runway for growth.

Revenue execution remains robust, with ARR rising 39.2%, net new ARR up 216% YoY, and net dollar retention at 124%, underpinned by sticky multi-product bundles and accelerating adoption of AI tools like the AI Era Plan and Draft One. Axon’s economic moat is wide, reinforced by high switching costs, network effects from 18,000+ connected agencies, brand dominance with 94% customer retention, and 378 active patents across hardware and software. Connected Devices and Software & Services grew +27% and +40% year on year, respectively, while Platform Solutions, including counter-drone and VR training, expanded 86%, illustrating successful ecosystem integration.

The Prepared acquisition enhances emergency communications capabilities, enabling faster, AI-driven response workflows despite short-term cash pressure. While valuation metrics remain elevated—Forward EV/Sales at 17.9x and Forward P/E above 100x—the company’s growth, market leadership, and resilient competitive advantages justify a premium. Axon’s combination of scale, innovation, and ecosystem stickiness positions it for continued expansion, making it a compelling long-term investment in public safety technology.

Previously we covered a bullish thesis on Axon Enterprise, Inc. (AXON) by RadnorCapital in March 2025, which highlighted rapid international and enterprise expansion, strong AI-era plan adoption, and consistent 30%+ revenue growth. The company’s stock price has appreciated approximately by 42% since our coverage. The thesis still stands as Axon executes on its growth strategy. Sergey shares a similar bullish view but emphasizes Axon’s full-stack platform transformation and strategic acquisitions driving long-term value.

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Disclosure: None.