Adding to 2 Hard Hit Holdings... and Our Plans for 4 Others
We're buying more shares of these positions at attractive levels and updating our shopping list.
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| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
AXON | Buy | 30 | 440 | 450 | 3.6 |
MSFT | Buy | 35 | 415 | 430 | 3.3 |
After you receive this Alert, the Pro Portfolio will make the following trades:
-- Buy 30 shares of Axon Enterprise (AXON) at or near $440. Following the trade, AXON shares will account for roughly 3.6% of the Pro Portfolio's assets.
-- Buy 35 shares of Microsoft (MSFT) at or near $415. Following the trade, MSFT shares will account for roughly 3.3% of the Pro Portfolio's assets.
Following our move Monday to pick up additional shares of SuRo Capital (SSSS) , we are making a similar move Tuesday with Axon and Microsoft. To say both stocks have been hard hit of late would be something of an understatement, but after waiting for them to find their footing, that is allowing us to join other longer-term investors in picking up shares of both at much lower prices compared to what we’ve seen in recent quarters.
Axon
In the case of Axon, the share price is back at levels we haven’t seen since November 2024, when its annual recurring revenue (ARR) was $885 million, and its future contracted bookings were $7.7 billion. Exiting the September 2025 quarter, those figures stood at $1.3 billion and $11.4 billion, respectively.
We’ve also collected numerous instances of public safety adoption of body cameras and AI adoption over the last five months, in part to address the current law enforcement shortage. In November, CFO Brittany Bagley said momentum was strong in the company’s bookings, indicating it would be a strong December quarter. One cause of that is the ongoing adoption we just mentioned, but it could also be catch-up spending associated with the federal government shutdown that ended on November 12.
Two catalysts for AXON shares we are watching this week are quarterly results from competitor Motorola Solutions (MSI) , what it says about the outlook for public safety spending, AI adoption, and its backlog or future contracted bookings.
The second is the level of short interest in AXON shares exiting January, which Nasdaq should update after Wednesday’s market close. The most recent figure stood at 54.65 million shares as of January 15.
Microsoft
We’ll be eyeing similar short interest figures for Microsoft as well, but our move to acquire the shares is tied more to rising AI and cloud adoption, and the company’s position with Azure. Like Amazon (AMZN) and other hyperscalers, Microsoft is adding capacity at a brisk pace, and that is hampering margins near-term, but we have seen those margins rebound in the past as that capacity is digested.
Some time ago, we pointed out that Microsoft today is very different than it was decades ago. Roughly two-thirds of its revenue is now cloud-related, and as we saw in the December quarter, that was the driving force behind its reported revenue and related growth. While MSFT shares have been pulled lower amid AI and software concerns, AI adoption and usage are propelling the company’s Azure/cloud business forward. Even if we back out the $250 billion in RPOs tied to OpenAI, exiting December, Microsoft’s remaining $375 million in RPOs rose 25% year over year.
Tying this back to one of the key things we are watching when it comes to AI, so long as the incremental growth rate for adoption and usage is rising, it should translate into a tailwind for AI and cloud capacity. That goes for Microsoft, but also for Amazon and Google (GOOGL) .
Of those three, the Portfolio’s smallest position is MSFT shares, which is why we are making this latest move, which will increase the position size to just below that of AMZN. If the positions were reversed, we would likely be adding AMZN shares instead, given our comments above and the oversold condition in those shares. For folks who are underweight AMZN shares, we see current levels as a good place to pick up some shares.
In terms of GOOGL shares, given the Portfolio’s position size of just over 4%, we’re not inclined to pick more up, especially when we look at our aggregate exposure. We will continue to look for entry points for folks who are underweight in the shares.
On Palantir and ServiceNow
In terms of our shopping list, we continue to keep a close watch on ServiceNow (NOW) and Palantir (PLTR) , but we are also balancing that against other opportunities outside of Tech.
We continue to see both as well-positioned to benefit from AI adoption in the enterprise, and with that in mind, we’ll note ServiceNow’s relationships with both Anthropic and OpenAI, as well as the continued headwind of enterprise AI adoption that is siloed data. That pain point benefits Palantir’s business as well.
Just because we are inclined to remain shareholders doesn’t mean we are ruling out taking advantage of the hefty pullbacks in those stocks. As we collect more data points, including mid-quarter updates at upcoming investor conferences, we’ll continue to evaluate that option.
In contemplating our next moves, we will keep a close watch on current holdings that have run considerably of late, moved past a 4% position size, and have entered an overbought condition. As Bob Lang has said many times, "no one ever went broke taking a profit."
(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)
At the time of publication, TheStreet Pro Portfolio was long AXON, MSFT, AMZN, GOOGL, PLTR, and NOW.
