Axon (AXON) delivered "clean" Q2 results, while the company's $15.1 billion of future contracted bookings met expectations, Morgan Stanley said in a note Thursday.

The note said that the future contracted bookings seem to indicate a "healthy underlying demand environment."

The investment firm also highlighted that the company's new disclosure for bookings with durations below five years will likely "give investors a cleaner read on near-term momentum and reduce the noise from changes in contract length."

Morgan Stanley said it now expects Axon to deliver revenue growth of 33% in 2026 and 34% in 2027.

The investment firm said its "slightly higher estimates" are a reflection of "continued traction across Axon's broader product and end-market portfolio, including counter-drone, international, enterprise and newer software offerings."

Morgan Stanley kept Axon's overweight rating and raised the company's price target to $640 from $600, citing the likelihood of faster revenue growth.

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