We recently published a list of Goldman Sachs Defense Stocks: Top 12 Stock Picks. In this article, we will take a look at where Axon Enterprise, Inc. (NASDAQ:AXON) stands against other top defense stock picks from the Goldman Sachs Portfolio.
After a subdued start to the year, American defense stocks are beginning to see improved returns. Investors are buoyed by President Trump’s plans for a $1 trillion defense budget for fiscal 2026, adding to the momentum from last month’s unveiling of the F-47 and announcement to resurrect the country’s shipbuilding industry.
READ ALSO: 10 Best Mid Cap Defense Stocks to Buy According to Analysts and 10 Best Performing Defense Stocks So Far in 2025.
The sector has received another boost after market chatter that tariff negotiations to address trade imbalances could include commitments from foreign countries to buy weapons from the US. In a statement released on April 8, Vietnam’s prime minister asked for a 45-day delay in the imposition of tariffs and stated his country would buy more American goods, including weapons, to tackle the trade gap.
On April 11, Goldman analyst Noah Poponak adjusted his ratings and price targets for defense stocks, and the most notable adjustment was a prominent Navy shipbuilder receiving a double upgrade on the back of an executive order signed by Trump to revitalize the sector. Poponak expects the stock to benefit, with shipbuilding expected to be a high priority within the defense budget.
The firm is known for its expertise in stock recommendations, helping investors identify high-potential companies. GS boasts a vast network of analysts, covers a wide range of stocks. It also has a research team led by analysts and economists from around the world, offering insights on the economy and the broader market.
In a report released in March this year, Goldman Sachs Research projected a significant increase in defense spending by EU member nations. Military expenditure in the euro area accounted for 1.8% of the GDP in 2024, and is projected to rise to 2.4% by 2027. The firm’s analysts estimate the increased spending to positively impact GDP growth, with every €100 spent on defense to boost GDP by approximately €50.
Defense stocks have rallied in Europe this year, as regional capitals unlocked billions to supercharge their militaries. While recent tariffs have sparked a major plunge in shares over the past couple of weeks, this has been a year to remember for several European defense contractors, with significant returns so far in 2025.
With that said, let’s head over to the list of the top defense picks from the Goldman Sachs stock portfolio.
A technician in a white coat testing an in-car system on a modern military vehicle.
Methodology
For this article, we scanned Goldman Sachs’ 13F portfolio as of December 31, 2024. From there, we picked the top 12 defense stocks according to their stake value and ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Axon Enterprise, Inc. (NASDAQ:AXON)
Stake Value as of Q4 2024: $180,226,886
Axon Enterprise, Inc. (NASDAQ:AXON) manufactures weapons and technology for law enforcement agencies, the military, and civilian use. The company integrates cloud software solutions and hardware devices to help enable modern policing, defense, and security.
The stock has delivered a phenomenal performance over the last five years, with a staggering EPS growth of 218%. Investor sentiment in the company continues to strengthen because of its impressive financials, investments in new products, and an expanding software business.
According to Insider Monkey’s database for Q4 2024, 64 hedge funds held a stake in Axon Enterprise, Inc. (NASDAQ:AXON), improving from 46 at the end of the third quarter. Wall Street analysts are also bullish on the stock, with a consensus Strong Buy rating. Jim Cramer recently provided a positive overview of the stock, citing its transformation into a dominant SaaS provider for police departments:
“Remember Axon? We had Patrick Smith on. That’s, well I got to tell you, this used to be a taser and people still think it’s taser. It’s a decent business but not a big one. What this company really is now, is the dominant software-as-a-service system for law enforcement in cities all over America. Its body cam system is the gold standard. Its AI work gets rid of the drudgery of filling out and reports gives police officers more time to do their actual jobs. The best? The bad guys plead guilty because it’s all on tape.”
Axon Enterprise, Inc. (NASDAQ:AXON) reported a revenue of $2.1 billion for fiscal 2024, growing 33% from last year, and nearly double from the figure two years ago. The company also marked 12 successive quarters of 25% or above revenue growth. Annual net income stood at $377 million, supporting the non-GAAP net income of $466 million.
Axon Enterprise, Inc. (NASDAQ:AXON) is among the top defense picks from the Goldman Sachs stock portfolio, with the investment banking firm having holdings of over $180 million in the company.
Overall, AXON ranks 9th among the Goldman Sachs Defense Stocks: Top 12 Stock Picks. While we acknowledge the potential of defense companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AXON but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.