Investing.com — Morgan Stanley on Tuesday upgraded taser maker Axon Enterprise Inc (NASDAQ:) to “obese,” lifting goal value by $200 to $700, banking on its sturdy development pushed by increasing software program portfolio, adoption of synthetic intelligence options
Axon shares up 1.6% at $646 in early buying and selling.
Morgan Stanley’s analysts say the 25-30% income development which Axon has put up is changing into extra sturdy over the long run, given growing adoption of its higher-priced software program bundles, reminiscent of officer security plans, and new choices like drones and license plate readers.
Axon’s relationship with giant public security departments has created barrier to entry for opponents.
Morgan Stanley (NYSE:) analyst highlighted Axon’s complete addressable market (TAM) of $77 billion stays largely untapped. Axon’s AI product, Draft One generated a $100 million pipeline simply three months after its launch.
“We’re extra prepared to ascribe worth to AI portfolio pulling by different merchandise, which might result in extra valuation upside,” Morgan Stanley mentioned
Whereas Axon’s inventory has soared round 150% year-to-date, with valuation steep at about 14.5 occasions its 2026 estimated gross sales, Morgan Stanley mentioned “development averaging over 40% over the past 5 years, the recurring nature of the enterprise has grown sufficient to extend perception in sturdiness round 30% development charges that together with uniqueness of asset, can assist a premium valuation.”
Axon is strongly positioned within the public security market, supported by police departments’ rising budgets for know-how and a scarcity of opponents providing comparable software program options. Reliance on public tax revenues, regulatory developments, and slower-than-expected adoption of recent {hardware} and software program options are danger on the upside.
