Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1\/100th the size of Nvidia. Continue \u00bb<\/a><\/p>\n However, AI stocks with exposure to software have mostly underperformed, as the iShares Expanded Tech-Software Sector ETF, which holds the leading software-as-a-service (SaaS<\/a>) stocks, is down 16%, significantly underperforming the S&P 500.<\/p>\n While some of those stocks deserve to be down, others have gotten thrown out with the bathwater, and one that looks oversold at this point is Axon Enterprise (NASDAQ: AXON), a law enforcement technology known for making TASER conductive electrical weapons, body and dashboard cameras, and a suite of software to help law enforcement agencies manage and process data like evidence, records, and investigations.<\/p>\n Historically, Axon has been a big winner on the stock market. The stock is up around 100,000% since its 2001 IPO when it was just a one-product company named TASER, but lately it’s struggled. A nine-year streak of gains was snapped last year when the stock fell 6%, and it’s been down most of this year as well, now off 30% from its peak in Aug. 2025.<\/p>\n For AI investors looking to rotate away from chip stocks for stocks that look oversold, Axon looks intriguing at the current price.<\/p>\n Let’s take a closer look at Axon and what it’s doing with AI.<\/p>\n A police offer interviewing a witness, wearing an Axon body camera.<\/p>\n Image source: Axon Enterprise.<\/p>\n An overlooked AI stock<\/p>\n While some software stocks have reported slowing growth due to either maturing markets or disruption from AI-native products like Anthropic’s Claude Code, that isn’t the case with Axon.<\/p>\n Revenue grew 34% in the first quarter on 125% net revenue retention, showing existing customers increased their software spend with the company by 25% over the last four quarters. It also raised its full-year revenue growth guidance from 27%-30% to 30%-32%, a clear sign of confidence from management.<\/p>\n While its core products like TASERs, cameras, and software continue to deliver solid growth, the company is also rapidly innovating with AI and other cutting-edge technologies.<\/p>\n Revenue from AI products rose more than 700% from a year ago. Those include Draft One, a generative-AI tool that writes first drafts of police reports based on body camera footage and audio, and software that can answer policy questions during arrests. Other AI products include Axon Assistant, a voice companion that can provide real-time translation and secure research capabilities, and Axon Vision, which scans video footage and tracks human forms to automatically prioritize or edit footage for review.<\/p>\n Axon has also moved into the drone market<\/a> with the help of its 2024 acquisition of Dendrone, which has enhanced its drone-as-first-responder vertical and its counter-drone security business. Revenue from counter-drone products was up more than 300% in the first quarter.<\/p>\n Overall, the company balances a healthy core business with innovative growth opportunities in new technologies like AI.<\/p>\n Will Axon keep climbing?<\/p>\n Axon stock has soared this week<\/a>, following a disclosure on Monday that President Trump bought between $1 million and $5 million worth of the stock in February. That news, which also included a report that Immigration and Customs Enforcement (ICE) solicited a $220 million TASER contract, portends more growth for the company from the federal segment, and Trump’s ownership could give it favorable treatment as well.<\/p>\n Axon isn’t cheap, trading at a price-to-earnings ratio of close to 100 based on adjusted earnings, and a price-to-sales ratio of 15. However, the company combines strong growth, solid margins, and significant upside potential with AI and its mission of making the bullet obsolete.<\/p>\n The catalyst from Trump’s purchase of the stock also shows there’s plenty of room for growth if investor sentiment swings back in its favor.<\/p>\n If you’re looking to diversify your AI holdings away from chip stocks and other traditional tech stocks, Axon looks like a great choice.<\/p>\n Should you buy stock in Axon Enterprise right now?<\/p>\n Before you buy stock in Axon Enterprise, consider this:<\/p>\n The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks<\/a> for investors to buy now\u2026 and Axon Enterprise wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.<\/p>\n Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $385,055!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,228,089!*<\/p>\n Now, it’s worth noting Stock Advisor’s total average return is 902% \u2014 a market-crushing outperformance compared to 209% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.<\/p>\n See the 10 stocks \u00bb<\/a><\/p>\n *Stock Advisor returns as of July 1, 2026.<\/p>\n Jeremy Bowman<\/a> has positions in Axon Enterprise. The Motley Fool has positions in and recommends Axon Enterprise and iShares Trust-iShares Semiconductor ETF. The Motley Fool has a disclosure policy<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Key Points Software stocks have widely underperformed this year due to fears of AI disruption. 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