We recently published a list of 10 Best Gun Stocks to Buy in 2025. In this article, we are going to take a look at where Axon Enterprise, Inc. (NASDAQ:AXON) stands against other best gun stocks to buy in 2025. Please keep in mind that the category of “gun stocks” covers not only gun manufacturers, but also suppliers and retailers of gun parts, ammunitions, or adjacent products such as the ones used by law enforcement and public safety officers.
America has a deep connection to guns, dating back to its earliest days. The Second Amendment of the Constitution guarantees citizens the right to bear arms. According to a Pew Research Center survey in 2023, about four in ten adults in the country say they live in a household with guns, while 32% personally use one.
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While there is mixed opinion over the right to own a gun and the laws that regulate its use in modern times, most gun owners consider the weapon an integral part of their freedom. About 72% cite protection as the major reason behind owning a gun. Others own the weapon for varying reasons, including gun collection, hunting, sports shooting, and job purposes.
While firearm purchases have been on a steady decline since the pandemic peak, the demand is still reasonably high. The United States is home to a thriving firearms industry that generates billions in revenue every year and provides employment to thousands of Americans. According to The Firearm Industry Trade Association, the sector contributed $90 billion toward the national output in 2023. This was 371% higher than the levels in 2008.
American companies that manufacture and sell firearms, ammunition, and hunting equipment had employed nearly 155,000 people, as of 2023. The market has also created thousands of jobs indirectly in the ancillary and supplier industries, resulting in over 384,000 jobs tied to the sector. Combined, these workers earn around $25.98 billion in wages.
While final figures for gun sales in 2024 are yet to be known, the FBI’s database recorded 5.5 million guns being bought by Americans during the first four months of the year. This was a slight dip year-over-year from 2023. California, Florida, and Texas represented 22% of gun purchases between January and April.
During his election campaign, Trump vowed to defend gun rights and oppose any firearm limits. After being elected President, the 78-year-old signed an executive order aimed at reversing Biden’s actions on the guns. On February 7, the U.S. president asked the Department of Justice to review regulations drafted by the previous administration to look for any ‘ongoing infringements’ of the Second Amendment.
Gun stocks surged last year in July, following the assassination attempt on Trump. The demand for guns and ammunition often sees an uptick after a law and order incident, or when there is chatter about a change in laws that could limit their availability.
Methodology
We scanned Insider Monkey’s database of 900 hedge funds for the third quarter of 2024 to identify gun, ammunition, or adjacent product companies. From there, we picked 10 companies with the highest number of hedge funds having stakes in them. Since there are few pure-play gun and ammunition stocks, we have also included sports and outdoor recreation companies selling shooting products in our list.
The best gun stocks to buy are ranked in ascending order by the hedge fund holders in each company. When two or more stocks were tied on the number of hedge fund holders, we outranked one over the other on market capitalization.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A technician in a white coat testing an in-car system on a modern military vehicle.
Axon Enterprise, Inc. (NASDAQ:AXON)
Number of Hedge Fund Holders: 46
Axon Enterprise, Inc. (NASDAQ:AXON) is an American manufacturer of weapons and technology for law enforcement agencies, military, and civilian use. The company has a diverse product catalog that includes TASER energy weapons, cameras, sensors, and others.
The stock has had a tremendous five-year run, during which its share price has grown by a whopping 656%, amid robust demand in its TASER segment and several tactical partnerships and acquisitions during this period.
The company’s financial performance remains strong as well. During its recent Q3 2024 earnings call on November 7, Axon Enterprise, Inc. (NASDAQ:AXON) reported that it had delivered above 30% annual revenue growth for each of the three quarters in 2024, driven by surging demand for all its products and services. This marked 11 successive quarters of over 25% growth, which has further bolstered investor confidence in the stock. Conestoga Capital Advisors stated the following regarding Axon in its Q4 2024 investor letter:
Axon Enterprise, Inc. (NASDAQ:AXON) continued to see robust demand for its products and services, from TASERs to body cameras to the software that powers many applications within public safety operations. Shares jumped on third-quarter results, which saw revenue grow 32%, EBITDA 58%, and backlog 33% to $7.7 billion. In addition, AXON continued to expand adjusted EBITDA margins, which were above 25% in the third quarter. AXON was a leader in three of the four quarters in 2024.
According to Insider Monkey’s database for Q3 2024, 46 hedge funds held a stake in the company – a significant improvement from 36 at the end of the second quarter. Navellier & Associates was the largest investor in the company, with holdings valued at over $8.6 million as of September 30, 2024. Based on investor sentiment, Axon Enterprise, Inc. (NASDAQ:AXON) is the best gun stock to buy in 2025.
Overall, AXON ranks 1st on our list of best gun stocks to buy in 2025. While we acknowledge the potential of gun companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AXON but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey. An earlier version of this article didn’t clearly define the “gun stocks” category.
