Axon Enterprise (AXON) Stock Forecast: Tariff Hit, AI Ambitions and Wall Street’s 40% Upside View

Axon Enterprise, Inc. (NASDAQ: AXON) has had a volatile 2025. After surging to an all‑time high near $886 in August, the public‑safety technology leader now trades around $568 per share, after a 3.98% gain on December 10. ^[1] That leaves the stock roughly 35–40% below its 52‑week high, even as the underlying business continues to grow revenue above 30% year over year. ^[2]

The sharp reset followed Axon’s Q3 2025 earnings, where the company beat on revenue but missed profit expectations as U.S. tariffs squeezed margins. Shares fell about 18–20% in the two sessions after the release. ^[3] Yet Wall Street still sees significant upside: major analyst aggregators put 12‑month price targets in the $815–$845 range, implying roughly 40–50% potential upside from current levels. ^[4]

Here’s a deep dive into Axon’s latest numbers, the key news around the stock, and what current forecasts and analyses are saying as of December 11, 2025.

Axon Enterprise (AXON) stock price and recent performance

Last close (Dec 10, 2025): $568.39, up 3.98% on the day, with intraday volatility near 5%. ^[5]
52‑week range: roughly $469 to $886, putting the stock about 35–40% below its peak despite a multi‑year run. ^[6]
1‑year performance: Axon’s share price is down about 10–11% over the past 12 months, lagging the broader market despite strong fundamentals. ^[7]
5‑year performance: long‑term investors are still well ahead; a recent fundamentals piece highlighted a five‑year return of roughly 349% for AXON. ^[8]

The recent drawdown has been steep. One market‑performance analysis notes that Axon fell from around $732 on October 31 to about $538 by early December, a drop of more than 25% in just over a month. ^[9] Technical models show a short‑term bounce but a longer‑term downtrend: Intellectia’s forecast engine flags 3 buy vs. 6 sell signals, with the stock in a consolidation phase and the 20‑day moving average still below the 60‑day and 200‑day averages. ^[10]

Short‑selling activity is elevated but easing. As of December 9, one quantitative tracker estimates a short‑sale ratio of about 20.7%, down from the prior day, suggesting some bears may be covering as the stock stabilizes after the earnings shock. ^[11]

Q3 2025: 30%+ growth streak meets tariff reality

Axon’s Q3 2025 report is at the center of the current debate around the stock.

From the company’s own release and independent earnings breakdowns: ^[12]

Revenue: $711 million, +31% year over year, the 7th straight quarter of 30%+ growth.
Software & Services: $305 million, +41% YoY, driven by premium cloud features and a growing user base.
Annual Recurring Revenue (ARR): about $1.3 billion, also +41% YoY, with net revenue retention (NRR) at a robust 124%.
Connected Devices: $405 million, +24% YoY:
- TASER revenue: $238 million (+17% YoY)
- Body‑worn and other personal sensors: $107 million (+20%)
- Platform Solutions (including real‑time operations and integrations): $61 million (+71%)

On profitability, the picture is more mixed:

GAAP net loss: roughly $2 million, implying a ‑0.3% net margin, due to higher costs and tariffs. ^[13]
Non‑GAAP net income: about $98 million; Adjusted EBITDA:$177 million, or 24.9% margin, in line with Axon’s ~25% full‑year target. ^[14]
Gross margin: about 60.1% GAAP (down ~60 bps YoY) and 62.7% adjusted; connected‑devices margins compressed by roughly 250 bps year over year. ^[15]
Free‑cash‑flow margin: around 4.7%, down more than 7 percentage points from the prior year as Axon leans into R&D, acquisitions, and tariff‑related costs. ^[16]

The earnings miss came on EPS, not revenue. Reuters notes that Axon reported non‑GAAP EPS of $1.17 vs. a Street consensus near $1.52, with management explicitly pointing to the first full quarter of U.S. tariff impacts as the driver of weaker margins. ^[17]

Despite the profit pressure, Axon raised guidance:

Q4 2025 revenue: now expected at $750–$755 million, roughly 31% YoY growth.
Full‑year 2025 revenue: about $2.74 billion, up from prior guidance of $2.65–$2.73 billion, implying ~31% annual growth and a ~25% adjusted EBITDA margin. ^[18]

Backlog and bookings add another layer of support:

Future contracted revenue (backlog):$11.4 billion, +48% YoY.
Net new ARR:$69 million, +97% YoY.
Bookings: about $1.4 billion in the quarter (+13% YoY) and more than 30% year‑to‑date. ^[19]

In short, Q3 reinforced Axon’s top‑line momentum and recurring‑revenue strength, but also highlighted how exposed its hardware margins are to tariffs and supply‑chain costs.

Product roadmap and AI strategy: from Axon 911 to ABW Mini

Axon is no longer “just” TASERs and police body cameras. Recent disclosures show a broader push into end‑to‑end public safety and AI‑driven operations.

Key initiatives from the Q3 shareholder letter: ^[20]

Axon 911:
- Built on the Prepared and Carbyne acquisitions, Axon 911 aims to modernize emergency call‑handling with cloud‑native, AI‑assisted platforms.
- Management says the combined offerings can cut response times from 7–10 minutes to as little as 120 seconds in high‑priority cases, by linking 911 calls directly with responders, connected devices and command centers.
- Features include real‑time transcription and translation, intelligent assistants for non‑emergency calls, keyword‑based alerts, and tight integration with Axon’s evidence and real‑time operations suite.
Axon Body Workforce (ABW) Mini:
- A compact body camera aimed at enterprise customers (retail, healthcare, logistics, etc.), slated for early deployments in 2026.
- Connects to Axon OS, supports two‑way voice, live streaming, automated alerts and AI features like Axon MetaCoach and Axon Assistant, extending Axon’s platform beyond traditional law‑enforcement buyers.
Drones and counter‑drone technology:
- Axon continues to integrate technology from Dedrone and its real‑time operations partners, positioning itself for large events such as the 2026 World Cup and for the drone‑as‑first‑responder trend. ^[21]

The company estimates its broader ecosystem now addresses a total addressable market (TAM) of about $159 billion, with Axon 911 alone expanding its opportunity by roughly $5 billion within a $74 billion segment spanning emergency communications and real‑time operations. ^[22]

Wall Street on Axon: ratings, price targets and upside potential

Despite the post‑earnings sell‑off, analyst sentiment remains broadly positive.

Consensus ratings and targets

MarketBeat tracks 18 analysts on AXON:
- Rating: “Moderate Buy”
- Breakdown: 14 Buy, 4 Hold, 0 Sell
- Average 12‑month target:$815, implying about 43% upside from $568.39.
- Target range: $610 (low) to $1,000 (high). ^[23]
MLQ.ai, focusing on recent price‑target activity:
- Consensus target:$845.38, or ~48.7% upside from $568.63.
- Range: $753 to $900, median $857.50.
- Latest move: RBC Capital issuing an $860 target on November 17, 2025. ^[24]
Quiver Quantitative aggregates 11 recent analyst targets:
- Median target: $850.
- Recent calls include Barclays at $702, Goldman Sachs at $800, Piper Sandler at $753, UBS at $610, Needham at $870, and RBC at $860. ^[25]
Public.com’s summary of 14 analysts:
- Overall rating: Buy.
- Around 93% of analysts rate Axon as either “Strong Buy” or “Buy”, with only 7% at Hold and none recommending Sell.
- It cites an average target near $804. ^[26]

High‑conviction voices

An Investing.com recap of recent Wall Street commentary highlights: ^[27]

TD Cowen reiterating a Buy with a $925 price target, emphasizing Axon’s path toward $3 billion+ scale and sustained high‑20% revenue growth.
RBC Capital initiating or reaffirming an Outperform at $860, framing tariffs as manageable against a long runway in U.S. public safety and international expansion.
CFRA upgrading Axon to Strong Buy even while trimming its target to $785 from $992, aligning valuations more closely with peers.
Piper Sandler cutting its target to $753 from $893 after the post‑earnings slide but keeping an Overweight rating.

In other words, there are virtually no outright bearish broker calls. The debate is less about whether Axon can grow – most models assume 20–30% revenue growth – and more about how much of that future is already priced into the stock.

Valuation: growth premium and what models say

Axon trades at a premium valuation, even after the recent correction.

A fundamentals piece highlighting Axon among “market‑beating stocks with solid fundamentals” pegs the stock at around 79.7x forward earnings at ~$553. ^[28]
Investing.com’s insider‑trading note remarks that Axon is valued at roughly 175x earnings on some metrics, albeit with gross margins above 60% and a balance sheet that carries more cash than debt. ^[29]

Valuation‑focused research offers a more skeptical view:

Simply Wall St’s discounted cash‑flow (DCF) model estimates an intrinsic value near $401.63 per share, suggesting Axon is about 36% overvalued at current prices.
They also note Axon trades at about 16.9x sales, far above the roughly 2.9x average for the broader aerospace and defense industry and somewhat above their own “fair” sales multiple of 14.3x, leading them to label the stock “overvalued” on both DCF and price‑to‑sales metrics. ^[30]

The upshot: Wall Street’s growth narrative and factor models are not fully aligned. Analyst price targets assume Axon can sustain high growth and expanding margins for many years. Cash‑flow‑based approaches see less upside, arguing that a lot of that optimism is already embedded in today’s price.

Insiders, institutions and short sellers

Recent headlines around Axon have also focused on insider selling.

On December 8, 2025, president Joshua Isner sold 19,600 shares for about $11.05 million, at prices between roughly $550 and $555 per share. After the sale, he still held about 249,500 shares. ^[31]
A TradingView news brief notes that on December 9, Isner sold 20,000 shares (~$11.1M), while CEO Patrick W. Smith sold 10,000 shares (~$5.5M), on a day when Axon’s stock actually rose 2.7% after winning new contracts. ^[32]

Quiver Quantitative’s insider‑trading dashboard puts this in a longer‑term context: ^[33]

Over the last six months, Axon insiders executed 125 open‑market trades: 124 sales and just 1 purchase.
CEO Patrick Smith has sold about 40,000 shares across 70 trades (~$28.8M), while president Isner has sold over 29,000 shares (~$22.1M).
Other key executives – including the COO/CFO, CPO/CTO, and CRO – have also been net sellers.

Heavy insider selling doesn’t automatically imply trouble – much of it may be tied to pre‑planned 10b5‑1 programs or diversification after a massive multi‑year run. But when combined with rich valuation multiples, it feeds the bear case that management sees the current price as an attractive level to take chips off the table.

On the flip side, institutional flows remain constructive:

Quiver data shows 633 institutional investors increased their AXON positions, while 557 reduced stakes in the most recent quarter.
Giant holders such as BlackRock, Vanguard and UBS Asset Management added hundreds of thousands of shares, even as some managers (like Vestor Capital and others) fully exited large positions. ^[34]

Regulation and ethics: AI body cameras under the microscope

Beyond numbers, Axon sits in the crosshairs of AI, policing, and civil‑liberties debates.

A widely discussed Associated Press report this fall examined Edmonton, Canada’s pilot of Axon body cameras with AI‑powered facial‑recognition capabilities. ^[35]

Key points from that coverage:

Cameras supplied by Axon are used with software that can match faces against a watchlist reportedly containing more than 7,000 people, flagging possible matches to officers in real time.
Ethicists and privacy advocates warn that such deployments amount to large‑scale field experiments on entire cities, given the risk of misidentification, bias, and mission creep.
Supporters argue that the tools can help identify dangerous suspects more quickly and improve officer safety, but critics worry about continuous surveillance and the chilling effect on public life.

For investors, this matters in two ways:

Growth driver: Advanced AI on cameras and in 911 workflows could deepen Axon’s lock‑in with agencies and open new revenue streams across software, analytics and services.
Regulatory and reputational risk: Missteps in AI deployment could trigger lawsuits, regulatory restrictions or contract losses, particularly in regions with strict privacy regimes.

The same tension shows up in Axon’s drone and counter‑drone businesses. Earnings commentary notes that U.S. regulatory limits on local drone mitigation are slowing the realization of the Dedrone opportunity, even as global demand for airspace security grows. ^[36]

Technical picture and quantitative forecasts

For traders focused on price action, the signals are nuanced.

According to Intellectia’s technical dashboard for AXON as of December 11, 2025: ^[37]

The stock rose 3.98% on December 10 (552.30 → 568.39) on reduced volume of about 1.4 million shares, with a 4.99% intraday range.
Overall, AXON currently shows 3 bullish and 6 bearish technical signals:
- Short‑term bullish: price above the 5‑day moving average; 5‑day MA above the 20‑day MA; positive 10‑day momentum.
- Mid‑ and long‑term bearish: 20‑day MA below the 60‑day; 60‑day below the 200‑day, indicating a longer‑term downtrend.
Estimated technical support sits around $516 and $496, with resistance near $584 and $605; breaks below or above these zones could trigger fresh sell or buy signals.

Quantitative forecasts from the same platform are aggressive for the medium term but cautious near term:

A pattern‑matching model projects AXON could fall about 6% over the next month, with a one‑month price estimate near $518, based on historical analogues.
Their longer‑term model envisions 2026 average prices in the $900–$1,100 range, with potential monthly highs above $1,200, implying 20–40% upside versus today – but these are purely algorithmic scenarios, not fundamental analyst targets. ^[38]

Such models can be useful for gauging sentiment and volatility, but they rest on back‑testing and pattern similarity rather than cash‑flow or competitive analysis. Professional investors typically treat them as one input among many, not as a standalone forecast.

Key drivers and risks for the Axon stock forecast

Bringing together recent news, forecasts and analyses, the bull and bear cases for Axon Enterprise stock into 2026 look roughly like this.

Bullish drivers

Sustained high growth: Axon is delivering 31% revenue growth with a 41% surge in software and services and 41% ARR growth, all while expanding its backlog to $11.4 billion and keeping NRR at 124%. ^[39]
Cloud and AI mix shift: With ARR at $1.3 billion and AI‑enabled offerings (such as Axon 911, analytics, and AI assistants) becoming a larger share of bookings, the business is tilting toward higher‑margin, more recurring revenue streams. ^[40]
Large TAM and strong competitive position: Axon is a leading provider of TASER devices, body cameras and digital‑evidence platforms worldwide, with a growing footprint in drones and real‑time operations. ^[41]
Wall Street support: Most brokers rate the stock Buy or Outperform, with consensus 12‑month price targets 40–50% above current levels. ^[42]
Long run of execution: Over the last decade, Axon has compounded revenue, broadened its platform and materially expanded margins, delivering multi‑hundred‑percent returns to long‑term shareholders. ^[43]

Bearish risks

Tariffs and margin pressure: Q3 showed that tariffs can meaningfully dent gross margins and earnings, and there is no guarantee of quick relief on trade policy. ^[44]
Valuation risk: Forward P/E ratios in the high‑70s and sales multiples near 17x leave little room for error. DCF models like Simply Wall St’s suggest the stock may be 30%+ overvalued relative to conservative growth assumptions. ^[45]
Stock‑based compensation and dilution: Axon’s Q3 review notes share counts rising 3–6% year over year, with stock‑based compensation around 21% of revenue, raising questions about how much of the company’s growth ultimately accrues to common shareholders. ^[46]
Regulatory and ethical headwinds: AI‑assisted surveillance, facial recognition and drone deployments face growing scrutiny. The Edmonton pilot, for example, has already sparked debates over civil liberties and the acceptable scope of real‑time monitoring. ^[47]
Insider selling and technical weakness: Heavy insider selling over the last six months and a technical profile still dominated by medium‑ and long‑term sell signals add fuel to the cautious view. ^[48]

Bottom line: where Axon Enterprise stock stands on December 11, 2025

As of December 11, 2025, Axon Enterprise sits at an interesting crossroads:

The business narrative is strongly positive: 30%+ growth, expanding software and AI revenue, a swelling backlog, and a product roadmap that aims to own the full emergency‑response and public‑safety workflow. ^[49]
The stock narrative is more conflicted: tariff‑driven margin pressure, a 35–40% drop from the highs, rich valuation multiples, heavy insider selling and technical signals that still tilt bearish beyond the very short term. ^[50]
Wall Street largely sees the drawdown as an opportunity, with average price targets implying around 40–50% upside and virtually no sell ratings – but cash‑flow‑based valuation work suggests investors are paying up for that growth. ^[51]

For investors following AXON, the key questions into 2026 are:

Can Axon prove that tariff and cost pressures are a one‑time reset rather than a structural hit to margins?
Will its AI‑heavy strategy (Axon 911, AI cameras, drones) translate into durable, high‑margin recurring revenue without triggering regulatory backlash?
And can the company continue compounding at 20–30% growth long enough to justify today’s premium multiples?

Those who believe the answer is “yes” tend to side with Wall Street’s bullish forecasts. Those who worry about policy risk, valuation and dilution lean more toward models that flag the stock as overvalued after a multi‑year run.

Either way, Axon Enterprise sits at the intersection of public safety, AI and civil liberties—and that combination is likely to keep AXON stock firmly in the spotlight for years to come.