Why Natera Is My Favorite Stock Idea for the Rest of 2026

AI-driven demand has boosted momentum in memory and storage, but uncertainty remains about the best risk/reward for the rest of 2026 and beyond. A shift toward lesser-appreciated market areas is proposed, following the idea of skating toward where demand is heading. Instead of focusing only on DRAM or NAND, attention is directed to companies applying AI in ways that can produce returns on investment. Natera is highlighted as a genomics innovator using cell-free DNA, which consists of small DNA fragments circulating in blood. The focus is on how applied AI can be used in genomics and the potential magnitude of rewards if the technology advances rapidly.

"It's been a blistering-hot 2026, as the AI revolution keeps rolling ahead. And while memory and storage stocks have been the trade of the first half, questions linger as to what kinds of names could offer the best risk/reward, not just for H2 2026, but perhaps for the next 18 months and beyond."

"Of course, it's been a fantastic time to be a momentum investor, but, in my view, I think that taking a step back to consider lesser-appreciated corners of the market could be the best way to play Wayne Gretzky's playbook of skating to where the puck is heading next."

"In my view, looking at the companies making use of applied AI could be in for significant spoils over the long term. While their shares might be less heated than DRAM or NAND plays, let's just say I like the price of admission, how AI is actually being applied to the field, and the magnitude of rewards to be had if the technology advances along an exponential curve."

"Enter shares of Natera ( NASDAQ:NTRA), a biotech company that I think should come up whenever applied AI is brought up. As others look at the swelling demand for chips, I'm looking for companies that can actually deliver ROIs. And when it comes to ROIs, perhaps there's no better place to look than among applied AI innovators in genomics."

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