Investors chasing artificial intelligence exposure in July have piled into the usual suspects: chipmakers, hyperscalers, and the mega-cap software giants. The more interesting setups are one layer deeper, where the picks and shovels of the AI buildout live.
Below are three names benefiting from the same secular tailwind, each with a distinct business model and a distinct risk profile. Two are genuinely off the mainstream radar. The third is a household name that has quietly become a contrarian setup after a rough first half.
Palantir Technologies (PLTR)
Palantir Technologies (NASDAQ:PLTR | PLTR Price Prediction) is a mega-cap at a $310 billion market cap, yet the setup has become genuinely underappreciated after a punishing first half. Shares are down nearly 20% year to date even as the underlying business accelerated. Q1 fiscal 2026 revenue landed at $1.63 billion, up 84.7% year over year, with U.S. commercial revenue up 133% to $595 million and adjusted EPS of $0.33 beating the $0.28 consensus. Management raised fiscal 2026 revenue guidance to $7.65 billion to $7.66 billion.
CEO Alex Karp framed the quarter bluntly: “Palantir’s Rule of 40 score has soared to 145%… we grew 85% last quarter, our highest-ever year-over-year growth rate.” A recent sovereign AI partnership with NVIDIA announced July 6 and a DA Davidson upgrade to Buy with a $175 price target have started to reset sentiment. Analyst consensus target sits at $183.12, with 63% bullish sentiment.
The bull case: Fundamentals are accelerating while the stock has cooled. The caveat: at a forward P/E near 89, Palantir still trades at a premium that leaves no room for a single quarterly stumble, and stock-based compensation of $201.6 million in Q1 remains a dilution headwind.
Astera Labs (ALAB)
Astera Labs (NASDAQ:ALAB) is the cleanest under-the-radar name here, a fabless semiconductor company that sells the connectivity fabric linking accelerators inside AI racks. At a $393 share price and $74.2 billion market cap, it is still a fraction the size of the mega-cap AI plays, yet it delivered Q1 fiscal 2026 revenue of $308.4 million, up 93.4% year over year, with non-GAAP EPS of 61 cents beating the estimate of 54 cents. Operating income jumped 448% year over year to $61.8 million.
Two catalysts converged in June and July: inclusion in the Nasdaq-100 index effective June 22, and the launch of the Scorpio X-Series 320-lane Smart Fabric Switch targeting a $20 billion merchant scale-up market by 2030. Bank of America raised its price target to $450 from $240, and Stifel Nicolaus raised its target to $460 from $260. CEO Jitendra Mohan attributed the quarter to “robust demand for our PCIe 6 portfolio.” Shares are up nearly 154% over the past year.
The bull case: Pure-play exposure to AI rack-scale connectivity, a product cycle inflection and index-flow tailwinds. The caveat: valuation is stretched at a trailing P/E of 296 with a beta of 3.67, and Q2 guidance implies gross margin compression to roughly 73%. Insiders sold approximately $460.1 million in stock over the trailing three months, though most transactions were under pre-arranged 10b5-1 plans.
Cloudflare (NET)
Cloudflare (NYSE:NET) is quietly repositioning as the network layer for agentic AI. Q1 fiscal 2026 revenue reached $639.8 million, up 33.5% year over year, with non-GAAP EPS of 25 cents topping the estimate of 23 cents. Current remaining performance obligations grew 34% year over year, and free cash flow expanded to $84.1 million at a 13% margin. Management guided fiscal 2026 revenue to $2.805 billion to $2.813 billion.
CEO Matthew Prince laid out the thesis directly: “If agents are the new users of the web, Cloudflare is the platform they run on and the network they pass through.” Shares are up nearly 39% year to date and 37.75% over the past year. Analyst consensus is a Moderate Buy with a target of $243.65, and 65% of analysts hold bullish ratings. For readers building broader exposure to the buildout beyond GPUs, our free report on AI infrastructure names outside the chipmakers pairs well with this thesis.
The bull case: Cloudflare Workers and expanding remaining performance obligations support a durable multi-year growth curve as enterprises route AI agent traffic through its edge network. The caveat: the company remains GAAP unprofitable at a -9.69% operating margin, and the announced 1,100-headcount reduction will drive $140 million to $150 million in restructuring charges concentrated in Q2 2026. CEO Matthew Prince also sold roughly $73 million across June and July under a pre-arranged 10b5-1 plan.
What to Watch Next
All three names report Q2 fiscal 2026 results within the next several weeks, and each carries a specific milestone worth watching. For Palantir, the trajectory of U.S. commercial revenue relative to the raised guide. For Astera Labs, the timing of Scorpio X volume shipments and whether gross margin holds above the guided 73% floor. For Cloudflare, whether restructuring charges land within the guided range and whether current RPO growth continues to accelerate. The AI infrastructure trade has evolved past the chipmakers. These three sit one layer deeper and remain less crowded than the headline names.
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