Top Trump trade hit by Trump tariffs
In the early days of Trump 2.0, Axon, the maker of Taser, body cameras, and other gear for police and security forces, was a top Trump trade.
That is, it was one of the group of companies whose share prices soared on expectations of big changes — in this case a surge of spending on police and immigration enforcement — under the new administration.
And sales of the company’s security products, under its Connected Products division, did rise. But in the just-reported third quarter, costs rose more. And one of those rising costs was the Trump administration’s tariffs.
In its post-earnings conference call, Axon officials blamed tariffs for a large part of the earnings miss that sent the stock plummeting by roughly 20% in the after-hours session Tuesday.
“The impact from tariffs is obviously hitting the Connected Devices business overall. This was the first quarter that we had a full quarter of impact from tariffs,” Axon CFO and COO Brittany Bagley told analysts on the call. “So as we look at the year-over-year step down, that really is attributable to tariffs.”
She continued, “As long as tariffs stay in place, I view that as sort of a onetime adjustment. So now that’s baked into the gross margins.”
Clearly the market didn’t like the sound of that. But perhaps those tariffs may not stay in place.
Late in the morning, Axon sharply cuts its losses on the day — it had been down as much as 20% — as oral arguments in the Supreme Court case to determine the legality of President Trump’s tariff regime got underway. On balance, its seems the administration’s arguments were getting a chilly reception from the justices.
