TEM Stock: Tempus AI Aims for 25% Growth

The last time we covered Tempus AI [TEM], back in February 2025, we noted a spike in institutional investment in the precision medicine company. 

In particular, Cathie Wood’s ARK had bought a number of shares in several tranches, adding them to the ARK Genomic Revolution ETF [ARKG] and the ARK Innovation ETF [ARKK].

We observed that any healthcare company that leverages artificial intelligence (AI) to improve diagnoses and patient care, especially when it comes to cancer, could potentially see significant growth.

Since then, the firm’s share price has been somewhat erratic.

Part of this is no doubt connected to the fact that the firm is so overtly aligned with AI. Indeed, CEO Eric Lefkofsky has called Tempus AI “a technology company operating in the healthcare space”. As such, it is vulnerable to investor sentiment around the broader sector, and fears of an AI bubble. 

With Tempus set to report earnings at the start of May, this is a good moment to check in on the stock and see if its prospects are still as bright as they were a year ago. 

Shifting the biotech paradigm

One person who thinks so is Cathie Wood. TEM stock is currently in third place among all of flagship fund ARKK’s holdings, at 5%, behind only CRISPR Therapeutics [CRSP], at 6.93%, and, of course, Tesla [TSLA], at 9.72%. Across all of ARK’s ETFs, it is in fourth place, at 3.76%.

Part of Wood’s enthusiasm for the firm no doubt stems from the fact that Tempus AI fits squarely within one of the themes that she is most excited about: multiomics.

As explained in the ARK ‘Big Ideas 2026’ report, multiomics is about “AI-native biology catalysing profound shifts in healthcare”.

The report highlights 10 companies working on different aspects of the broader space. One is CRISPR, which “develops CRISPR/Cas9 therapies that edit DNA to disrupt harmful gene activity.” Another is Tempus AI, which, the report observes, “offers RNA sequencing to profile gene expression for precision oncology and other non-oncology research applications.”

According to ARK, “big data enables better diagnostics. By 2030, roughly one third of FDA-approved diagnostics and medical devices are likely to be AI-powered.” As an example, it cites Tempus AI’s AI diagnostic ECG-AF. 

Shea Wihlborg, who co-authored the ‘Multiomics’ chapter of the report, published a blog post on April 13 in which she argued that the next wave of biotech innovations will aim to extend “one-time genetic cures from rare diseases to highly prevalent conditions like cardiovascular disease, for which both CRISPR Therapeutics and Eli Lilly [LLY] are advancing clinical programmes. In our view, as clinical validation increases, acquirers making early bets on paradigm-shifting modalities are likely to capture the largest long-term value.”

Good stuff. But paradigm-shifting modalities are one thing, and the nitty-gritty of revenue growth is another. Let’s look at the firm’s most recent earnings to get a sense of how well it’s translating exciting potential into hard cash. 

Strong Q4 bodes well for 2026

Reporting at the start of February, Tempus AI reported a strong end to 2025, with Q4 revenue rising 83% year-on-year to $367.2m, including 33.5% organic growth. 

Diagnostics remained the primary engine, more than doubling revenue to $266.9m, driven by solid volume gains in oncology and hereditary testing. MRD testing volumes also accelerated, climbing 56% quarter-on-quarter. Meanwhile, data and applications revenue grew a more modest but still robust 25.1% to $100.4m, with data licensing a standout contributor.

Profitability trends improved. Adjusted EBITDA turned positive at $12.9m, although net losses widened to $54.2m due largely to stock-based compensation. For the full year, revenue surged 83.4% to $1.3bn, with both core segments delivering strong growth.

Tempus exited the year with over $1.1bn in contracted revenue and a 126% net revenue retention rate, alongside a solid gross profit of $759.7m. Management expects momentum to continue, guiding for $1.59bn in 2026 revenue, implying nearly 25% annual growth, alongside adjusted EBITDA of approximately $65m.

CEO Lefkofsky said that “the strength of our unit growth in diagnostics along with the accelerating growth of our data business is proof that we are unique in this space.”

He underlined that the company’s 450-petabyte multimodal data set constitutes a significant moat: “If somebody wanted to replicate our data business, they’d have to go reproduce all that real-time data, which is quite hard to do. We just have a unique offering and other people have been unable to replicate it.”

Operational highlights

Tempus broadened its AI-driven oncology capabilities with the launch of Paige Predict, a digital pathology platform that analyses standard H&E slides to infer 123 biomarkers across 16 cancer types. This enables more informed testing decisions, particularly when tissue samples are constrained, and strengthens the integration of insights across its genomic portfolio.

Clinical validation also advanced, with a new study showing its Immune Profile Score outperforms traditional biomarkers in predicting immunotherapy response. Notably, it identified additional responders often missed by standard approaches, including 13% of colorectal and 17% of rare cancer patients.

On the partnerships front, Tempus entered a multi-year collaboration with NYU Langone Health to track tumour evolution through serial molecular profiling, aiming to develop AI-led diagnostics and personalised treatments. It also expanded its clinical footprint via Northwestern Medicine, which will deploy Tempus’ full genomic testing suite to enhance precision oncology and trial design.

What do the analysts think?

Tempus AI “is actively consolidating its lead in the medical data wars”, wrote Wiltone Asuncion for Tikrfollowing Q4 results. Healthcare providers are “aggressively” adopting its AI-driven diagnostic tools, while its Insights data licensing business “is having a breakout moment, growing a staggering 69% in the fourth quarter when adjusting for warrant impacts.”

In short, according to Asuncion, “Tempus is methodically absorbing the research and development workflows of the world’s largest pharmaceutical companies. By providing de-identified, real-world data to help pharma giants design more intelligent clinical trials and accelerate drug discovery, the company is creating a recurring revenue stream that is decoupled from the cyclicality of traditional diagnostics.”

Zacks, meanwhile, recently observed that, while the share prices of peers Doximity [DOCS] and Omnicell [OMCL] have fallen 57.6% and 14.5%, respectively, over the past year, TEM stock is up over the same period.

Zacks analysts concluded that the firm’s “Data and Applications business is scaling steadily, with strong customer retention and increasing demand. Backed by investments in AI and expansion into new data domains, Tempus is well positioned to drive sustained growth across diagnostics and data monetisation.”

According to Stock Analysis, five analysts rate TEM stock a ‘strong buy’, three a ‘buy’, three a ‘hold’ and just one a ‘sell’. The average price target of $72.83 equals a 47.04% increase in the stock price over the next year. The lowest target is $35 and the highest is $100.

Conclusion

Tempus AI’s strong 2025 and expanding role in data-driven healthcare suggest its 25% growth target for 2026 is achievable, though far from guaranteed. The investment case hinges on continued execution in diagnostics and the scaling of its higher-margin data business, both of which appear to be gaining traction. For now, TEM stock remains a high-growth, AI-linked play – promising, but still exposed to sentiment swings and the perpetual challenge of converting innovation into sustained profitability.