Drone Chatter Lifts This Portfolio Holding
We like the company’s positioning and its potential to be another leg to the story.
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If you read our opening comments, then you have a good idea why shares of Axon Enterprise (AXON) are rallying Thursday. I’m referring, of course, to the 6th item in today’s “8 Key Items Shaping the Stock Market” that dishes on potential efforts by the Trump administration to fund drone companies. In that discussion, I mentioned the ginormous drone program funding increase asked for by the Defense Department compared to the relatively small amount it is spending this year.
While Axon’s Taser, body camera and corresponding software & services, including AI, are often the focal point, the company counts the federal government as a customer for its drone and counter-drone offerings. Dedrone is an AI-powered airspace security and counter-drone platform that detects, tracks, identifies, and mitigates unauthorized drones.
During Axon’s presentation Wednesday at a TD Cowen conference recapping its strong Q1 2026 performance, it also touched on multiple growth vectors across public safety and commercial segments. That included bookings growth of 300% for Dedrone during the quarter and the 140% growth in AI product revenue.
The presentation also discussed areas in which Axon is attacking the enterprise market with its Axon Body Mini for retail workers, Fusus for video stream aggregation, and Dedrone for counter-drone protection, with use cases for campuses, data centers, warehouses, housing, valuable inventory, and stadiums. We’ve talked before about body cameras helping combat retail shrinkage as well as their uses in the healthcare segment. To that management added that field trials are underway with retailers.
On the topic of drones, Axon shared its view that Drone First Responder (DFR) technology has applications in officer safety, situational awareness, car chases, and critical infrastructure monitoring. On that front, the company is looking to capitalize on its Taser and body camera position to grow its drone business. We can see that being another driver of the higher margin software & services business, especially video and video recall, which is part of its digital evidence management tools.
We’ll continue to monitor Trump-related developments on drone funding as it has the potential to result in another leg to the Axon story. That potential and the multiple signals we collect nearly every week about body camera and AI adoption in public safety keep us bullish on the name.
More Pro Portfolio:
- We’re Adding to and Lifting Our Rating on This Holding
- We’re Tracking 29 Signals Across 9 Portfolio’s Investment Themes
- Weekly Roundup: Profiting From the Rally, But Not Letting Our Guard Down
At the time of publication, TheStreet Pro was long AXON shares.
