Taser-maker Axon pops 18% as AI boosts demand for its software tools

Axon Enterprise, known for its Taser products, body cameras, and drones, experienced a remarkable stock increase of over 18% following its impressive fourth-quarter performance. The company surpassed Wall Street expectations by reporting adjusted earnings of $2.15 per share alongside a revenue of $797 million. Analysts had predicted earnings of $1.60 per share and revenue of $755 million, making Axon’s results particularly noteworthy. The optimistic outlook doesn’t end there; Axon provided positive revenue forecasts for 2026, anticipating growth rates between 27% and 30%, exceeding the expected 25.8%. CEO Rick Smith highlighted the transformative impact of artificial intelligence on the company since its inception in 1993, stating that AI has created a moment unlike any he has witnessed before in the industry. He emphasized Axon’s commitment to deploying AI thoughtfully, aiming to deliver unique value to its customers. AI has already made a significant impact on Axon's operations, accounting for approximately 10% of total bookings last year, which translates to around $750 million. The company's integration of advanced technology into its offerings includes features such as automatic license plate recognition and the Axon Assistant, a voice-activated companion integrated into body cameras, which has garnered over 500 customers. On the financial side, Axon’s software business saw a remarkable 40% growth this quarter, reaching $343 million, and is expected to soon outpace hardware sales, driven by the momentum generated by AI innovations. Despite these gains, the total net income reported was about $3 million, or 3 cents per share, a decline from $135 million, or $1.67 per share, from the previous year. This downturn was attributed to operational losses and strategic investments. Looking ahead, Axon has ambitious targets set for 2028, aiming for $6 billion in annual revenue and a 28% adjusted EBITDA margin.