US Enterprise Hardware and Networking "Previews: AXON, KEYS, MSI, VIAV" Spinola

Research evidence excerpt

US Enterprise Hardware and Networking "Previews: AXON, KEYS, MSI, VIAV" Spinola

market. Motorola is acquiring a leading player in the space for $1.5B, but Axon

saw this opportunity early and was able to acquire Dedrone two years ago at

~$490M all-in and has been benefitting from Dedrone's strong growth in '26.

Motorola commented at an investor conference that the TAM opportunity for

counter drone is $1B and expected to grow to $3B by 2030. It seems

reasonable that Dedrone could grow into a $500M+ business for Axon, which

would put Dedrone in the same ballpark as body cameras (we model

35% growth in Platform Solutions through 2030 but it's possible we are

conservative).

Memory pricing is a risk: This is true across most of tech, but it's worth noting

that Axon has memory exposure in the body and fleet camera business and

that business is sizeable (Personal Sensors were 15% of revenue in F25). Axon

noted on that call that it had a lot of memory in inventory entering the year and

that it gave the company the flexibility to "be a little more patient to ride this

wave out on the memory costs", but with memory costs continuing to rise, this

could negatively impact FQ2 results. Axon's guide is EBITDA margin is

unchanged in '26 at 25.5% and implies margin expansion in the back half from

the 25.0% in Q1.

FigureSource:UBS1: estimates,Axon EnterpriseVisible Alpha Estimates vs. ConsensusAxon

Keysight Technologies FQ3 Preview

Setup: Keysight has performed inline since FQ2 results, roughly flat vs. up 2% for

the S&P. The stock has moved sideways after selling off on what was initially

perceived to be strong FQ1 results. Keysight is now trading at 27x our F27E

EPS and 23x our F28E.

Sentiment: Sentiment on KEYS remains positive despite the stock going sideways