Should You Invest in Natera (NTRA)?

Parnassus Investments, an investment management company, released the “Parnassus Mid Cap Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The Russell Midcap Growth Index fell 7.12% in the first quarter, starting with a continuation of the late 2024 rally but later experiencing a sharp decline. The Fund (Investor Shares) fell -9.98% (net of fees) in the quarter, compared to the Russell Midcap Growth Index’s -7.12% fall. Stock selection in Consumer Discretionary and Industrials contributed to the relative performance, while Communication Services and Health Care detracted. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Parnassus Mid Cap Growth Fund highlighted stocks such as Natera, Inc. (NASDAQ:NTRA). Natera, Inc. (NASDAQ:NTRA) is a diagnostics company that develops and commercializes molecular testing services. The one-month return of Natera, Inc. (NASDAQ:NTRA) was -2.27%, and its shares gained 44.89% of their value over the last 52 weeks. On July 3, 2025, Natera, Inc. (NASDAQ:NTRA) stock closed at $161.76 per share, with a market capitalization of $22.088 billion.

Parnassus Mid Cap Growth Fund stated the following regarding Natera, Inc. (NASDAQ:NTRA) in its Q1 2025 investor letter:

"We also added four competitively advantaged, highly profitable and market-share-gaining companies whose stocks had sold off due to what we view as transitory issues. Natera, Inc. (NASDAQ:NTRA) leads the fast-growing, underpenetrated liquid biopsy market. Natera is an innovative market leader in the growing and under penetrated liquid biopsy market, with the potential for meaningful profitability at scale. We were able to invest in the stock after it had fallen from its highs."

Natera, Inc. (NASDAQ:NTRA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held Natera, Inc. (NASDAQ:NTRA) at the end of the first quarter, which was 77 in the previous quarter. Natera, Inc. (NASDAQ:NTRA) reported revenue of $502 million in Q1, representing approximately 37% year-over-year growth. 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 undervalued AI stock set for massive gains.

In another article, we covered Natera, Inc. (NASDAQ:NTRA) and shared the list of billionaire Stan Druckenmiller’s stock picks with huge upside potential. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of NTRA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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