From TASER to the Skies. Buy Axon Stock While It's Still Down 49%

Truly great companies have an uncanny ability to evolve and expand, replicating what made them successful at one thing, and turning that into excellence at something else. Axon Enterprise (NASDAQ: AXON) made its name with TASER, a non-lethal electric weapon used by law enforcement to incapacitate suspects. Then it expanded into body cameras, dominating the U.S. market.

Now Axon is taking to the skies. The company has entered the law enforcement drone and robotics market, which it estimates is a $20 billion opportunity. It's a perfect fit into what has become a hardware ecosystem, tied together by Axon's cloud software offerings.

Here's why this new opportunity makes Axon stock a buy, especially while it is trading 49% below its August 2025 all-time high.

Image source: Getty Images.

The war in Iran is putting drones on the map at home

The war in Iran showcased drones as a major player in modern warfare. In today's digital world, there are countless videos and articles about how drones are becoming a primary tool in battle. The war also illustrates how difficult drones can be to defend against, opening up security vulnerabilities that U.S. law enforcement could invest more in to address.

Axon has already spent years laying the foundation for its drone business. It partnered with Skydio in 2021 to sell its drones through Axon Air, the company's comprehensive drone hardware and software solution. Axon then acquired Dedrone in late 2024, a leader in smart airspace security and counter-drone systems. It's fantastic timing, positioning Axon to supply the technology to protect stadiums and other public spaces that may be susceptible to hostile drones.

Drones are an obvious win for a company that already has exciting growth prospects

Axon already works extensively with most public agencies throughout the United States. Having that existing relationship makes cross-selling much easier. For example, Axon has started offering artificial intelligence (AI) solutions. Revenue from AI grew by over 700% in the first quarter of 2026.

The key advantage here is that Axon sells both the hardware and the software that ties everything together. It's a complete ecosystem at this point, and drones are just as simple a tie-in, just as body cameras were after agencies were already using TASER. Axon's future bookings currently stand at $14.3 billion, near its all-time high from the prior quarter, and customers have a net revenue retention rate of 125%, meaning existing customers continue to spend more.

Wall Street analysts currently estimate the company will grow earnings by an average of 30% annually over the next three to five years. Axon's 4% decline has dropped the stock's valuation to about 54 times 2026 earnings estimates. That's still quite a lofty earnings multiple, but it's a price worth paying given the company's strong growth outlook.

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Axon Enterprise. The Motley Fool has a disclosure policy.