Our Take on Axon With Shares Under Renewed Pressure

While our newest portfolio addition, Applied Materials (AMAT) , is rising today, we can’t help but see the large decline in holding Axon Enterprise (AXON) . The move in AXON comes without any downgrade or EPS cuts that we can find. While competitor Motorola Solutions (MSI) is showcasing what it calls “enterprise intelligence” at the ISC West 2026 event, Axon is in attendance as well, likely displaying all its Connected Devices, Software and Services offerings. We’ll look for comments from Wall Street analysts later this week when the event is over.

Recent rumblings about the White House looking for more funding for the U.S.-Iran conflict may have some thinking public safety spending could be diverted, but our contacts in Washington indicate President Trump would never sign such a bill.

With a beta of 1.52, we know AXON shares are prone to wider swings compared to the market, and that is even truer when some folks are on edge. We also know that when we look at the chart below, it looks like the shares are in the process of closing the gap created back in late February.

That gap was created by the post-Q4 2025 earnings pop in the shares, one that was fueled by Axon's beat-and-raise results, but also the sharing of its 2028 target model. As a reminder, the 2028 target includes annual revenue of $6 billion compared to the $2.78 billion achieved in 2024, and adjusted EBITDA margins of ~28% compared to 25.5% in 2025.

Working through those figures, the implied growth in Axon’s adjusted EBITDA is ~140%. Between 2025 and 2028. That outlook is backed by the $14.4 billion in future contracted bookings exiting 2025, compared to $10.1 billion at the end of 2024. The continued mix shift toward the higher-margin software and services business, near 73%, over the next few years, compared to 46%-47% for the Connected Devices business, bodes well for that adjusted EBITDA expansion. Indeed, the degree to which Axon’s AI-led products are adopted more quickly than expected is a potential reason to think that adjusted EBITDA guidance could be a wee bit conservative.

With AXON at ~3.8% of the Pro Portfolio’s assets, we’re not inclined to pick up more shares should they close the gap in the chart near $442, but that would be a nice place for folks who are underweight the name to do some buying.

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At the time of publication, TheStreet Pro Portfolio was long AXON and AMAT.