Axon Enterprise (AXON +9.83%) hit a 18-month-low on Tuesday, though there wasn't any obvious news out on the law enforcement technology leader.
The stock closed down 9.7% and was down more than 12% during the session.
If there was a catalyst for the sell-off, there appeared to be two possibilities. First, the controversy around the company's new $1.3 billion campus in North Scottsdale, Arizona, which will include its global headquarters, manufacturing facilities, 1,200 residential units, a hotel, and a commercial space on 76 acres is coming to a head. The other was Axon Week, its industry conference that started yesterday. Let's look at the HQ first.
Image source: Axon.
What's happening with Axon's new HQ
The Scottsdale City Council approved Axon's campus plan last November, which the company sees as key for its continued growth and attracting top-tier talent.
However, a labor union collected enough signatures to force a ballot referendum on the development, and because of that, Axon said in January that it was halting the new headquarters in Scottsdale and beginning a nationwide search for a new location. Arizona later blocked the referendum.
Now, a group seeking to block the project, specifically aiming at the apartments, filed two aggressive lawsuits against Axon. For the first one, oral arguments are expected to begin on Friday, according to a report in the Scottsdale Progress, and the future of the project could hinge on the judge's decision.
A loss in court would be a clear setback for Axon's growth ambitions.
Axon Week kicks off
The other potential source for Tuesday's decline was the first day of Axon Week, the company's annual industry conference.
There wasn't any clear news out of the conference that would have hit the stock, though it's possible that analysts heard something they didn't like.
The company did have some promising product announcements, including three new AI tools. Those were Axon Vision, an AI-based technology that recognizes critical activity in live video as it happens, helping to make searching through video footage more efficient; Axon Assistant, an add-on feature to Axon's body camera; and Axon 911, which is founded on the acquisitions of Prepared and Carbyne and offers cloud-based infrastructure for 911 dispatch centers.
NASDAQ: AXON
Key Data Points
Is Axon a buy on the dip?
The pullback on Tuesday adds to a rough 2026 for Axon, which has gotten swept up in a broader sell-off in software stocks despite a strong earnings report in February.
Axon's price-to-sales ratio has now fallen to below 10 for the first time since 2023, down from near 30 at its peak in 2025. The company continues to grow rapidly and is consolidating its leadership in law enforcement technology with acquisitions and investments in AI.
While the stock has floundered, the business is executing, and the valuation now looks a lot more reasonable than it did six months ago. The company's hardware business also protects from the AI disruption threat that is currently menacing enterprise software stocks.
Investors should keep an eye out for more news from Axon Week and the outcome of the legal battle over the new HQ, but the stock looks like an attractive buy at current levels.
