Is Axon Stock Increasing Your Market Risk?
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If you own Axon Enterprise (AXON), the maker of TASER devices and body cameras, you have seen its shares move more than 10% in a single day several times over the past year. You likely hold Axon alongside money that already tracks the broader market, and each of these moves layers on top of what that money does that same day. So on the market’s bad days, does Axon make your losses bigger?
Axon Falls Over Twice As Far On Down Days
Yes. In the year to October 27, 2026, a $10,000 holding in Axon lost about $136 on the average day the S&P 500 fell. The stock’s average decline on those days was more than twice the index’s drop. On the average day the index rose, that same holding gained about $94.80, roughly one and a half times the broader market’s advance. Axon magnified both kinds of market days for you, but the bad ones most.
Axon shares also swung far more widely. The stock’s annual volatility, a measure of how far the price swings from day to day, was 62.0% over the past year, compared with 12.7% for the S&P 500. For every 1% move in the index, Axon moved an average of about 1.55% in the same direction. Owning Axon adds to the market risk you already carry rather than steadying it.
Will Axon Keep Swinging This Hard?
Probably. Most of those swings have belonged to Axon itself rather than the broader market. But Axon swings so widely that even its loose tie to the index still adds up to about 1.55% for every 1% index move. Over the past year, Axon’s daily moves were only loosely tied to the index, scoring 0.32 on a scale where 1 means the two move in lockstep.
Axon’s business is still changing fast. Sales grew 35% from a year earlier in fiscal Q2 2026, the quarter ended June 30, 2026. The company’s operating margin, the share of sales left as operating profit, was 5.2% during that quarter, up from a small loss a year earlier. Management said the company is taking a hit to its margins as it scales newer businesses such as counter-drone systems. Big swings are also nothing new for Axon shares, which traded with far more volatility than the index over the past five years too.
Has Axon Paid You Enough For Your Risk?
Partly. In the five years to October 27, 2026, Axon returned 19.5% a year, compared with 12.5% for the S&P 500. Its shares swung far more over those five years, however, logging an annual volatility of 50.6% against 17.0% for the index. For each point of that swing, Axon earned about 0.385 points of yearly return, compared with 0.735 for the S&P 500. You earned a higher return holding Axon than from the index, but secured only about half as much for each unit of swing you took on.
If the past year is a guide, Axon will tend to rise more than your index fund on the market’s up days and fall much further on its down days, though the stock can move its own way on any single day. Axon is a fast-growing company whose profits are still thin, so check how much you already hold in companies like it. For the risk to be worth taking, Axon’s fast sales growth would have to turn into wider profit. The company’s operating margin for fiscal Q3 2026, due in November 2026, is the number to watch.
Who Is Watching Your Portfolio’s Risk When You’re Not?
Axon Enterprise is one risk to keep an eye on, and most portfolios hold many. Watching all of them, day after day, is hard to do alone. Our partner advisory firm builds portfolios on Trefis research, starting with the HQ Portfolio, whose edge has been limiting losses when markets fall. Talk it through on a free 30-minute call, and bring your hardest questions.
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