It’s hard to pick just one favorite stock idea for the rest of the year. 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.
Not to shoot down hopes of further gains in the likes of Micron (NASDAQ:MU | MU Price Prediction), which some analysts think could rise above the $1,600 mark, but I do think that those not comfortable with the state of the DRAM trade might find it wise to consider the other corners of the market that AI could touch and even transform in a profound way.
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.
Natera stock could be the hidden AI stock that’s not yet fully appreciated by Wall Street
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.
For those unfamiliar with the name, it’s a leading innovator in cell-free DNA (cfDNA) technology. In other words, it’s tiny bits of DNA floating in one’s bloodstream. Indeed, when it comes to the bull case for the rise of AI, its application to cure cancer is often brought up as the number one narrative to keep advancing the technology in spite of its risks. And while Natera doesn’t have the cure, it does stand out when it comes to detection. The first step is early detection.
Of course, detecting cancer with a blood test is difficult, given the amount of noise in a blood sample. Not to mention, a tiny piece of a tumor’s DNA would represent such a tiny (one molecule per 10,000), almost unnoticeable part of one’s blood. In other words, it’s too tiny to even be noticed. But it’s a great problem for AI to help tackle.
As the company makes good use of Nvidia‘s (NASDAQ:NVDA) helping hand (remember that it’s one of Nvidia’s many partners in applied AI), the firm stands to make use of a powerful trove of data. All the tumor genomes and all those blood draws are profoundly powerful for training an applied AI model.
One of the widest data moats around
It’s also a source of a moat. Data is the new oil, gold, or, in today’s era, where it’s harder and more expensive to obtain DRAM, memory chips. Whether we’re talking about the oncological applications or other areas, Natera is a hyper-growth company worthy of any radar, especially if you buy the “eliminating cancer” narrative.
The $30.6 billion company is hard to value after correcting from its January high. Now down around 16% from its peak, perhaps there’s an opportunity to buy. For those who choose to enter the name at around $213 per share, one will be in good company alongside big-name investors, including Stanley Druckenmiller’s Duquesne Family Office, which topped up its position in Q1 and, at the time, held the name as its largest holding.
At a time when investors want to see ROI, I think it’s time to look to the companies with huge TAMs and the right partnerships that are already putting AI to work. When it comes to “liquid biopsies” for cancer detection and beyond, I think the TAM has the potential to be quite sizeable. Natera stands out for its profound vision and its underestimated moat that, I think, will allow it to excel in AI-driven ROI.
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