Tempus AI Down 13%- Is It Time to Buy?

Shares of Nancy Pelosi’s favorite artificial intelligence stock Tempus AI (NASDAQ:TEM) are falling more than 13% in morning trading after reporting fourth quarter and full-year 2024 earnings results yesterday after the market closed.

Although Tempus reported strong revenue growth, up almost 39%, and much narrower losses both sequentially and from the year-ago period, the market is selling off the stock as the healthcare-focus AI stock missed analyst expectations on the top and bottom lines.

By the numbers

Tempus AI reported revenue of $200.7 million in Q4, up 35.8% from last year, and beating its earlier estimate of $200 million, but it missed Wall Street’s forecast of $203 million. For the full year, revenue hit $693.4 million, a 30% increase, showing solid growth in its AI-driven precision medicine business, like genomics and data services. Gross profit jumped to $122.1 million, or margins of 49.7%, led by strong data and services growth. Tempus ended 2024 with $940 million in future contract value, meaning it has a lot of business lined up.

Yet there are yellow flags, too. The AI stock reported a quarterly net loss of $13 million better than the $50.5 million loss from last year, but it again missed expectations, as it posted adjusted losses of $0.18 compared to forecasted losses of$0.15 to $0.17 per share. 

Tempus also guided for 2025 revenue of $1.24 billion, a huge 79% jump, but its adjusted EBITDA forecast losses of $5 million, suggesting it is spending big on research and acquisitions, like the recently completed deal for Ambry Genetics.

Tempus looks promising but remains risky. Its AI tools and partnerships in healthcare could drive big growth, but the earnings miss, ongoing losses, and high spending might continue spooking the markets.

It will need to show that is can deliver on its ambitious 2025 goals and manage costs. If it does so, TEM stock could thrive, but even the smallest hiccups will send shares reeling. After hitting a high of $95.11 per share earlier this month, Tempus AI has fallen 36%.

Key takeaway

Tempus AI wasn’t even on anyone’s radar until former House Speaker Nancy Pelosi took a position in the stock. She purchased 50 call options with a strike price of $20 that also expire on Jan. 16, 2026, putting the value of the trade between $50,000 and $100,000.

The California congresswoman has an unusual ability for making exceptionally profitable trades. According to Unusual Whales, Pelosi generated returns of 70.9% in 2024 compared to 24.9% for the S&P 500.  Even Warren Buffett is only able to manage 20% annual returns over his six decades of investing.

Politicians are not supposed to buy or sell stocks based on information they get from their oversight of the companies they regulate, but their portfolios tend to exhibit consistent outperformance relative to the returns of the index, calling into question whether they are really as good as their record suggests.

The healthcare AI outfit is still new to the public markets. It only went public last June in an IPO that priced the stock at $37 per share. That means even with today’s haircut, TEM stock is still up 58% from its launch.

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