Analyst says AI stock picked by Cathie Wood will surge

Here’s what could be next for the subject of a bold bet by Nancy Pelosi and Cathie Wood.

Mar 3, 2025 - 21:43

Analyst says AI stock picked by Cathie Wood will surge

Cathie Wood, Ark Investment’s chief executive, has said that the "most underappreciated application of AI" is health care.

“We’ve got 37 trillion cells in our body, and they’re going to be sequenced as we’re looking for cures,” Wood said on CNBC in February.

Health care "is responsible for an incredible amount of storage out there right now. Data is the name of the game,” she said.

One of the artificial-intelligence-related health-care companies that she has been actively buying is Tempus AI (TEM) .

Her Ark funds purchased 774,000 shares in November, followed by 1.9 million in December, 618,000 in January, and 527,000 in February.

As of Mar. 3, Tempus AI ranks as the ninth-largest holding in the Ark Innovation ETF (ARKK) , accounting for 4.36% of the portfolio.

Nancy Pelosi, the former speaker of the House of Representatives, also bets on this stock.

In January, Pelosi bought 50 call options (bets that a stock will rise) for Tempus AI valued between $50,000 and $100,000. The stock rallied more than 40% in two days following the disclosure.

Eric Lefkofsky, founder and CEO of Tempus AI, said the company was “on track to achieve our key financial milestones, with expected robust revenue growth and positive adjusted Ebitda in 2025.”
Michael Kovac/Getty Images

What does Tempus AI do?

Tempus AI is a health-technology company founded in 2015. It is embedding AI into diagnostics to empower physicians and researchers to make personalized data-driven decisions.

"The ability to deploy AI in precision medicine at scale has only recently become possible," the company said in an SEC filing.

"Advances in cloud computing, imaging technologies, large language models, and low-cost molecular profiling, along with the digitization of vast amounts of health care data, have created a landscape that we believe is finally ripe for AI."

Tempus AI went public on June 14, 2024, with its initial public offering priced at $37 a share.

On Feb. 24, the company reported its Q4 and full-year 2024 financials.

The company has not yet turned a profit. It reported net losses of $706 million for 2024, $214 million for 2023 and $290 million for 2022.

For Q4 2024 Tempus AI reported an adjusted loss per share of 18 cents, missing analysts' expectations of a 15-cent loss. Q4 revenue came in at $200.7 million, up 36% year-over-year and below the $202.8 million consensus analyst estimate.

The company's guidance came in better. It estimates fiscal 2025 revenue at $1.24 billion, above the analyst consensus of $1.23 billion.

“Our investments in AI have positioned us well for the future, as technologies that seemed unimaginable a few short years ago increasingly allow us to make our diagnostics intelligent, helping patients live longer and healthier lives,” said Eric Lefkofsky, founder and CEO of Tempus AI.

“We remain on track to achieve our key financial milestones, with expected robust revenue growth and positive adjusted Ebitda in 2025,” he added.

The stock is down more than 17% in the five days following its Q4 earnings and revenue report. Even after that tumble, the stock is 63% higher year-to-date.

Analysts raise Tempus AI’s stock price targets

Several analysts have raised their price targets on Tempus AI after its report.

Loop Capital raised its price target on Tempus AI to $74 from $52 and maintained a buy rating. If they're correct, it would represent a 48% surge in Tempus AI's stock price.

The investment firm says Tempus is a play on the precision-medicine trends sweeping through health care, the analyst tells investors in a research note.

"Tempus AI should remain a long-term beneficiary of next-generation sequencing, which is at a tipping point as it rapidly becomes the standard of care," Loop said.

More Wall Street Analysts:

Bank of America raised its price target on Tempus AI to $60 from $54 and reiterated a neutral rating after the company reported Q4 results in line with its mid-January preannouncement, thefly.com reported on March 3.

JPMorgan downgraded Tempus AI to neutral from overweight and raised the price target to $55 from $50.

The firm said Tempus AI's 2025 guidance demonstrates "sustainable" data and service revenue, "encouraging" average selling price traction, and ramping profitability.

While JP Morgan continues to believe in Tempus AI's "unique combination" of diagnostics and data, it sees the shares as fully valued on a relative basis after the recent stock run.

"The recent artificial intelligence headlines and Nancy Pelosi call option buying have driven increased retail interest," the firm said.

At last check Tempus shares were trading off 6.9% at $52.30