
Taser-maker Axon Enterprise (NASDAQ:AXON) could see its stock soar tomorrow, padding gains of almost 150% that it has already made in 2024.
That’s because Axon could be added to the Nasdaq 100 index later this month. With a market capitalization of $49 billion, the law enforcement technology stock could end up ranking as the 73rd largest stock on the index, just ahead of Diamondback Energy (NASDAQ:FANG) at $47.9 billion.
24/7 Wall St. Key Points:
- Axon Enterprise (AXON) stock has witnessed phenomenal gains this year that has catapulted its market valuation to new heights.
- It positions the company to be included on the Nasdaq 100 index, which could fuel further stock price appreciation.
- Although there is high demand for its law enforcement technology, investors still might want to use caution before following the crowd into AXON stock.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.
To be listed on the Nasdaq 100, a company has to be on the Nasdaq exchange and have a minimum average daily trading value of $5 million. However, the index uses a modified market cap weighting system to ensure the largest companies don’t overly influence its performance. It suggests Axon will account for around 0.25% of the index when Nasdaq performs its annual reconstitution of the index.
The committee that determines the index composition met at the end of November and will announce its decision on Dec. 13. The actual inclusion date is the first trading day after the third Friday of the month, or Dec. 23, which will require exchange-traded funds (ETFs) that track the index to pour the $550 billion worth of buying power they hold into AXON stock.
While that will occur just before Christmas, expect retail investors to rush in tomorrow to buy up Axon shares when the announcement is made. Axon Enterprise is already a member of the S&P 500.
Unstoppable demand for new technology

Axon has been on a steady upward trajectory since 2018, but two years ago began building on that success. Revenue has soared by 25% or more for the last 11 quarters and was up 36% in the third quarter of 2024.
Beyond just its Taser stun guns, which it calls conducted electrical devices (CED), it also develops body worn cameras, evidence database systems, and more recently, drones. In addition to using drones for law enforcement efforts, the technology company launched Axon Aid, which uses them to assist in disaster situations. The program also includes cost-free assistance for mental health and wellness for first responders, as well as volunteer efforts.
Earlier this year Axon introduced generative AI into its software called Draft One. It takes video from police body cameras and extracts data to write the first draft of police reports and more. It expanded the AI capabilities to allow its body cameras to enable real-time language translation between two speakers in over 100 languages.
Sales are ratcheting higher. Its software and sensors segment, which includes everything but Tasers, saw revenue jump 36% from last year and 3% sequentially, while its Taser business saw a better than 36% increase in sales year-over-year and a 13% gain from last quarter.
Importantly, margins are also widening. Where its CEDs enjoyed a 20 basis point (bp) expansion in adjusted gross margins to 63%, sensors and software realized a 150 bp expansion to 75.2%.
Since the beginning of November, AXON stock is up 73%.
Key takeaways
Just before Axon reported its quarterly results last month, I said the stock was a prime candidate for a stock split. While it hasn’t split its shares in 20 years, it actually split them three times in one year because of the rapid melt up in the stock.
It is experiencing a similar situation today, and with the stock trading at over $640 a share today, and the possibility for further appreciation if and when it is added to the Nasdaq 100 index, it remains primed to announce a split again. But AXON stock is not cheap. It trades at 166 times earnings, 25 times sales, and goes for over 200 times the free cash flow it produces.
That makes it hard to recommend buying in at these levels. While there is still a long runway of growth ahead of Axon Enterprise, I’d wait for a better price, no matter what stock traders do tomorrow.
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