Goldman Sachs’ Top Growth Investors: 34 Stocks With The Highest Investment For Growth

Page 25 of 33

9. Axon Enterprise, Inc. (NASDAQ:AXON)

Growth Investment Ratio: 172%

Number of Hedge Fund Holders: 36

Axon Enterprise, Inc. (NASDAQ:AXON) is a non-lethal defense equipment provider and software company. The firm primarily makes and sells TASER guns that are used by law enforcement officials to subdue suspects and civilians for defense purposes. It also provides cartridges used in TASER guns and software products to law enforcement agencies for data analysis. As a result, Axon Enterprise, Inc. (NASDAQ:AXON) has a diversified income statement that relies on price-favored hardware sales and margin-heavy software. As of H1 2024, 59% of the firm’s revenue came from hardware sales while the remainder was through software. Within hardware, Axon Enterprise, Inc. (NASDAQ:AXON) also benefits from recurring sales through its cartridges. The law enforcement exposure of its business also hedges against economic cycles, and it requires Axon Enterprise, Inc. (NASDAQ:AXON) to stay on top of its game by launching upgrades to ensure rivals cannot steal market share. A catalyst for the stock could be the incoming Trump Administration’s greater focus on border control to drive the demand for Axon Enterprise, Inc. (NASDAQ:AXON)’s products.

Baron Funds mentioned Axon Enterprise, Inc. (NASDAQ:AXON) in its Q3 2024 investor letter. Here is what the firm said:

“Axon Enterprise, Inc. (NASDAQ:AXON) is the leading provider of tasers, body cameras, software, and other solutions for law enforcement. Shares rose following an exceptionally strong second quarter earnings report, highlighted by revenue growth of over 25% for the 10th straight quarter. This was led by nearly 50% growth in Axon’s software business. Axon introduced Draft One software for law enforcement officers, which leverages generative AI and body-worn camera audio to produce high-quality draft report narratives in seconds, freeing up 20% to 25% of an officer’s day. This product showcases the many potential generative AI use cases in Axon’s business. International bookings were up 100%, driven in part by growing interest in Draft One and the Taser 10 product. Run by a visionary founder with a best-in-class team, the company is continually pushing new and innovative products in the pursuit of becoming the de-facto public safety ecosystem. We believe Axon will become a much larger company over time.”

Page 25 of 33