Weaker-Than-Expected Margin Hurt Axon Enterprise (AXON) in Q4

Fidelity Investments, an investment management company, recently released its “Fidelity Growth Strategies Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fidelity Growth Strategy is a diversified equity strategy aimed at domestic midcap growth stocks. The approach focuses on identifying quality companies that deliver steady above-average growth and can outperform over time. The Fund (Retail Class shares) returned -3.44% in the quarter compared to the benchmark Russell Midcap® Growth Index’s -3.70% return. In Q4, the U.S. stock market continued its rapid rebound, driven by robust corporate fundamentals and strong spending on artificial intelligence. Mid-cap growth stocks underperformed, while large-cap stocks gained mainly from a narrow group of companies connected to generative AI, and small-cap equities benefited from interest rate sensitivity. As 2026 begins, the firm believes the business cycles in the U.S. and globally remain positive. The Strategy remains focused on companies possessing durable competitive advantages and growth potential. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Fidelity Growth Strategies Fund highlighted Axon Enterprise, Inc. (NASDAQ:AXON) as one of its leading relative detractors. Headquartered in Scottsdale, Arizona, Axon Enterprise, Inc. (NASDAQ:AXON) is a provider of public safety technology solutions. On February 4, 2026, Axon Enterprise, Inc. (NASDAQ:AXON) stock closed at $430.65 per share. Axon Enterprise, Inc. (NASDAQ:AXON) delivered a -29.74% return in the past month, and its shares are down 36.43% over the past twelve months. Axon Enterprise, Inc. (NASDAQ:AXON) has a market capitalization of $3.101 billion.

Fidelity Growth Strategies Fund stated the following regarding Axon Enterprise, Inc. (NASDAQ:AXON) in its fourth quarter 2025 investor letter:

“Conversely, a larger-than-benchmark position in Axon Enterprise, Inc. (NASDAQ:AXON) (-21%) was the biggest detractor from relative performance. The company develops products and technology for the law enforcement industry and recently has expanded into AI-driven products that enhance police productivity. Axon’s latest quarterly results, reported in November, disappointed investors. Though revenue exceeded forecasts, earnings fell short of analysts’ expectations, largely due to weaker-than-expected margins. We saw this as a temporary setback, and Axon was our No. 2 holding and No. 3 overweight at year-end.”

In another article, we covered Axon Enterprise, Inc. (NASDAQ:AXON) and shared a list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.