What happened

Shares of Axon Enterprise (NASDAQ:AAXN), the maker of both Taser stun guns and Axon police body cameras, are on a tear for a third consecutive day Tuesday. After rising by as much as 11% late in the afternoon, Axon stock was up by 9% at the close of trading.

It's not too hard to figure out why.

Cartoon professor with a pointer explains why a stock arrow is rising

Image source: Getty Images.

So what

Demonstrations, protests, and riots around the country have lifted the shares of gunmakers like Sturm, Ruger and Smith & Wesson -- and Axon offers a non-lethal alternative to those companies' products in the form of its Taser electroshock weapons.

However, I don't think it's the demonstrations per se that are lifting Axon's share price. As a rule, the company's body cameras and (to a lesser extent) its stun guns, aren't readily available to the public -- no matter how appealing they might be to some consumers in times like these.

Rather, I suspect that the popularity of Axon stock now can be found on the other side of the coin.

With demonstrators demanding police reform and more accountability for officers who abuse their authority, many investors clearly believe more police departments are likely to respond by outfitting their officers with Axon body cameras (and likely signing up for its digital records management services, too). In addition, demonstrators' demands for a reduction in police violence is viewed as likely to spur new sales of non-lethal Tasers.

Now what

In both cases, I believe that investors are probably correct in their assumptions. As police civil rights abuses inspire demonstrations that are being met with even more aggressive -- and widely televised -- abuses by the police, demands for both increased accountability and a reduction in the use of force will increase. This can only be good news for Axon stock. The only question is: With Axon unprofitable over the last 12 months, and trading for some 125 times forward earnings, will the growth in demand driven by these events be sufficiently strong to justify the stock's near-$100 share price?

On that point, I remain agnostic.