Down 54%, This Tech Stock Looks Like a Buy With or Without AI

Axon Enterprise (AXON) is a leading law enforcement technology company that deals in both hardware and software. The company's stock is down 54% from its peak in 2025, and it has fallen 30% year-to-date, even as the broader software sector is flat for the year. Despite the sell-off, Axon's strong track record of consistently strong revenue growth over the last decade and its innovative culture present compelling reasons for investors to consider it a buy.

The company's AI products, such as Draft One, a generative AI tool that writes first drafts of police reports based on camera footage, demonstrate its innovative capacity. Axon's wide economic moat in serving law enforcement agencies, reinforced by a history of acquisitions, further strengthens its position in the market. While the stock is currently expensive with a price-to-sales ratio of 12, it's not excessively so.

The recent earnings results and convertible debt offering do not seem to indicate underlying weaknesses in the business. The stock's recent sell-off is likely due to short-term investor sentiment rather than any fundamental weakness in Axon.