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What Makes Natera (NTRA) an Investment Bet?

Brown Capital Management, an investment management company, released its “The Brown Capital Management Mid Company Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The Mid Company Fund (Institutional shares) returned -7.85 % in the quarter significantly underperforming -3.21% return for the Russell Midcap Growth Index. The strategy focuses on EGCs with strong revenue growth, competitive advantages, and differentiated products that save time, and money or deliver significant value to consumers. In addition, check the fund’s top five holdings to know its best picks in 2024.

Brown Capital Management Mid Company Fund highlighted stocks like Natera, Inc. (NASDAQ:NTRA), in the second quarter 2024 investor letter. Natera, Inc. (NASDAQ:NTRA) develops and commercializes molecular testing services. The one-month return of Natera, Inc. (NASDAQ:NTRA) was 0.06%, and its shares gained 111.51% of their value over the last 52 weeks. On September 5, 2024, Natera, Inc. (NASDAQ:NTRA) stock closed at $117.50 per share with a market capitalization of $14.179 billion.

Brown Capital Management Mid Company Fund stated the following regarding Natera, Inc. (NASDAQ:NTRA) in its Q2 2024 investor letter:

“Natera, Inc. (NASDAQ:NTRA) is a diagnostic-testing company that uses advanced technology to detect small amounts of DNA in a simple blood test. The company offers everything from prenatal tests for common genetic disorders to cancer-recurrence tests to transplant-organ-rejection tests. Natera’s products save time, lives, money and headaches by apprising expecting parents, cancer patients, and transplant patients earlier and easier. The company invests 25% of its revenue in R&D and is often first to market with the best clinical validation. This allows Natera to establish strong mindshare among the medical community early on, making it difficult for others to compete. While most of the company’s revenue comes from its prenatal tests, cancer-recurrence testing is the future of the company with a $15 billion to $20 billion market opportunity. Natera is unprofitable but we see a path to profitability in the coming years as the business scales and it dramatically improves its reimbursement cadence, which is in process. Based on the company’s large markets, strong innovation, defensible positions and impressive clinical data, Natera has a long runway for topline growth that should average 20% over the next five years.”

A doctor in a medical laboratory wearing a protective suit and a face mask, running a molecular diagnostic test.

Natera, Inc. (NASDAQ:NTRA) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held Natera, Inc. (NASDAQ:NTRA) at the end of the second quarter which was 58 in the previous quarter. Natera, Inc.’s  (NASDAQ:NTRA) second quarter revenues were up 12% from Q1 2024 and up 58% from Q2 2023. While we acknowledge the potential of Natera, Inc. (NASDAQ:NTRA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed Natera, Inc. (NASDAQ:NTRA) and shared Alger Weatherbie Specialized Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

The best part? You can discover everything about this company and its groundbreaking technology right now.

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Wall Street calls this $3 stock a “Melting Ice Cube.” They said the same thing about BTI before it returned 90%.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

My name is Inan Dogan. I’m the co-founder and Research Director of Insider Monkey. I have an important message for you today.

Since March 2017, my stock picks have returned 16.5% annually. Today, I’ve found an opportunity even bigger than my British American Tobacco call.

Two years ago, Wall Street wrote off British American Tobacco (BTI) as a “melting ice cube.” The stock had crashed 40% from its peak, and consensus said the business was dying.

We looked under the cover and realized they were wrong.

We alerted our subscribers, and BTI returned 90% in just 16 months.

Now if you had invested just $10,000 in BTI in June 2024, you’d be sitting on $19,000 in October 2025.

Today, we have identified a nearly identical pattern in a digital-first giant trading at $3.

While the market panics over a surface-level revenue decline, our PhD-led research shows management has actually surgically cut $100 million in waste to focus on high-margin growth.

This pattern is a hallmark of our 16.5% annual return track record. The current opportunity offers a 400% upside potential—dwarfing even our 90% BTI return.

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