What Makes Axon (AXON) an Attractive Opportunity?

Brown Advisory, an investment management company, released its “Brown Advisory Mid-Cap Growth Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Strategy lagged the Russell Midcap® Growth Index in the fourth quarter due to stock selection. While the performance was in line with the expectations for the full year. The firm believes that the Strategy underperformed in 2025 because it did not own Palantir Technologies Inc (PLTR). The Strategy focuses on achieving solid risk-adjusted returns by investing in high-quality compounders with fair valuations and market capitalizations between $2 billion and $50 billion at the time of purchase. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Brown Advisory Mid-Cap Growth Strategy highlighted Axon Enterprise, Inc. (NASDAQ:AXON) as one of its new addition to the portfolio. Axon Enterprise, Inc. (NASDAQ:AXON) is a public-safety technology company focused on developing connected law enforcement products and services including taser, body camera, drone, and other hardware solutions. On March 20, 2026, Axon Enterprise, Inc. (NASDAQ:AXON) stock closed at $496.27 per share. One-month return of Axon Enterprise, Inc. (NASDAQ:AXON) was 17.20%, and its shares lost 13.32% over the past 52 weeks. Axon Enterprise, Inc. (NASDAQ:AXON) has a market capitalization of $39.9 billion.

Brown Advisory Mid-Cap Growth Strategy stated the following regarding Axon Enterprise, Inc. (NASDAQ:AXON) in its fourth quarter 2025 investor letter:

“We initiated a position in Axon Enterprise, Inc. (NASDAQ:AXON), an innovative provider of technology solutions to the public safety market, as its three-year return profile became more attractive during the quarter. As one of the few software companies generating meaningful revenue from GenAI enabled products—led by DraftOne and related offerings, which drove more than $500 million in bookings over the year— we believe Axon is well positioned to continue gaining budget share by delivering solutions that save time, reduce labor intensity, and enhance officer and civilian safety.”

Axon Enterprise, Inc. (NASDAQ:AXON) is not on our list of 40 Most Popular Stocks Among Hedge Funds. According to our database, 68 hedge fund portfolios held Axon Enterprise, Inc. (NASDAQ:AXON) at the end of the fourth quarter, up from 61 in the previous quarter. In Q4 2025, Axon Enterprise, Inc.’s (NASDAQ:AXON) revenue grew 39% year-over-year to $797 million. While we acknowledge the potential of Axon Enterprise, Inc. (NASDAQ:AXON) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.