Law enforcement technology company Axon (NASDAQ:AXON) has long been one of my favorite growth stocks in the market. My bullishness dates back to when Axon was still named Taser International, and traded under the ticker symbol ‘TASR.” At the time, the TASR stock price was $20. Today, AXON stock trades near $200.
The bull thesis on AXON stock this entire time has been shockingly consistent and simple.
Law enforcement agencies across the globe are antiquated. They’re stuck in the 20th Century. They need to modernize and digitize. Axon is creating a suite of compelling products to help them do just that, like body cameras, smart weapons and cloud-hosted records management systems.
The company has virtually no competition in this space, having either acquired or squashed all other relevant police tech companies.
The opportunity is enormous, as police spending in the U.S. measures nearly $200 billion every year — and peaks into the trillions of dollars globally. The business model is highly profitable, as Axon commands pricing power on its hardware products given the lack of competition, and is quickly growing its much-higher-margin software business.
From head to toe, AXON stock is a winner. That much is obvious. But you may be looking at the AXON stock chart and asking yourself: Did I miss the opportunity to buy AXON stock?
No. Far from it. In fact, there’s never been a better time to buy AXON stock.
Police Spending Is About to Surge
With Joe Biden now the President of the United States, police spending in America is in a position to surge over the next few years — and all those dollars will likely get allocated to the things Axon sells.
Here’s the thing.
Some Democrats may have adopted the “defund the police” movement. Biden did not. In fact, Biden has said consistently on his campaign trail that his plan to improve law enforcement is to give police more money to improve themselves. He reiterated that recently in a town hall on national TV, saying ““We have to put more money for this to work.”
So, it’s safe to say that police spending will increase dramatically over the next four years — and maybe even longer.
Over that stretch, sociopolitical pressures will force law enforcement agencies to spend that extra budget on things that actually improve law enforcement operations. Things like smart weapons (to decrease fatal encounters), body cameras (to increase transparency), cloud solutions (to improve operational efficiency), etc.
Axon sells all of those things. Indeed, they sell the best smart weapons, the best body cameras, the best cloud solutions, so on and so forth.
Net net, it looks like Axon is positioned to have a blockbuster next four years — and AXON stock will power way higher during this stretch.
Axon’s Business Momentum Is Accelerating on All Fronts
As police spending significantly increases, Axon’s business momentum will continue accelerating — even without expanded police budgets.
In 2021 alone, Axon has done the following:
- Sold body cameras in new geographies for the first time ever. Axon sold body cameras to the Ravenna Municipal Police in January, and it will be Italy’s first police department to deploy Axon’s body cameras. With this deal, Axon is not just a U.S. story; It’s a global police tech company, with an addressable market into the trillions.
- Received huge follow-on orders. Also in January, the Los Angeles Police Department renewed its contract with Axon, setting it up for the largest TASER 7 smart weapon deployment in the world. Axon additionally received big orders from the Fairfax County Police Department, the Suffolk County Police Department, the San Jose Police Department and the Tucson Police Department.
- Jumped into the private security market. Axon signed a body-camera partnership with private security company Cancom in January, underscoring the need for body cameras extends well beyond police and into security, too.
That’s all in just one month. Talk about momentum.
With all this momentum at its back, Axon is in a great position to turn a surge in police spending over the next four years into a surge in revenues and profits at the company.
As that happens, AXON stock will power higher.
Bottom Line on AXON Stock
Axon stock is one of the best long-term growth stocks in the market today. Long-term, it has huge upside potential.
But it’s not the best growth stock to buy today.
Instead, the best growth stock to buy today is a company that reminds me of a young Amazon (NASDAQ:AMZN). Indeed, I think buying this stock today could be like buying AMZN stock back in 1997 — before it soared thousands of percent.
Which stock am I talking about?
Click here to find out.
P.S. If you’ve been following my work, you know I’m extremely bullish on innovation. And right now, we have rarely seen such opportune moments throughout history to invest in innovation.
While I have many stocks on my watch list that excite me, there’s one stock in particular that I’m absolutely giddy about. And I’ll be giving this stock pick away – for FREE – at my first-ever Exponential Growth Summit on Feb. 23, at 4 p.m. EST.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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