Wealthy figure Steven Cohen Offloads Apple Shares and Grabbs lesser-known AI Stock Surging 500% in Under 3 Years' Time
Point72 Asset Management's Steven Cohen has made headlines with his hedge fund's moves. After divesting from tech giant Apple in the third quarter, Cohen invested in Axon Enterprise, an AI-focused public safety company.
Despite Apple's undeniable brand power and position in consumer electronics, the company's iPhone sales have been on a downward trend in China, with an reported 18% decline in the December quarter. This decline, coupled with potential losses to Apple's service revenue if a federal judge prohibits Google's default search placement in Safari, and Wall Street's 9% earnings growth forecast, has left investors questioning the iPhone's value.
On the flip side, Axon Enterprise, renowned for its Taser devices and body cameras, has capitalized on the growing importance of AI in public safety. The company's recent quarter showed robust sales growth, with Axon Evidence software—powered by AI—effortlessly managing and reviewing surveillance footage, slashing report-writing time.
Axon's dominance in Tasers, body cameras, and digital evidence management software, coupled with its market potential of $77 billion, sets Axon up for further growth. However, the stock's expensive valuation, with current annual earnings growth estimates at 22%, has caused some unease among investors.
Despite Axon's pricey valuation, its steadfast revenue growth and market leadership make it a tempting investment. As long as Axon can maintain its AI-powered solutions and continues its growth trajectory, it could emerge as a promising stock option for investors with a long-term outlook.
Given Cohen's focus on potential opportunities, he might consider the robust growth of Axon Enterprise in the finance sector, particularly its AI-driven software solutions improving efficiency in public safety. This could motivate further investments in the company, contributing to his diversified portfolio.
In light of Cohen's philosophy of identifying undervalued assets with substantial growth potential, Axon Enterprise, despite its premium valuation, could capture his interest due to its dominance in the market and consistent revenue growth, fueled by advancements in AI technology.