As the grandson of Fairy Tail's guild master Makarov, Laxus comes from a lineage of great magical power (as mentioned by Gajeel). His combat prowess is enough to fight on par with very powerful S-Class mages, such as Mystogan, or defeat two powerful mages simultaneously, such as Dragon Slayer users like Natsu Dragneel and Gajeel Redfox. Since most others around him consider him as the most obvious candidate to take the title of guild master after Makarov, Laxus is a frighteningly powerful opponent. Even Gajeel, the strongest member of the former Phantom Lord guild, feared what would have happened had Laxus joined the battle between the guilds, and his monstrous strength even made Gajeel quiver in fear of fighting him alone saying he is a "monster". 

Lightning Magic: Laxus' magic that allows him to create and control lightning. When Laxus snaps, his body randomly discharges small traces of lightning from his eyes and mouth, and his pupils disappear. His physical and magical abilities seem to greatly increase, as well as his defensive power. It should be noted that both him and his grandfather share the trait of having huge magical power reserves and emit auras when they are completely pissed off. As Fried and Gajeel have said before, he inherited his grandfather's frightening power and magical prowess.