Healthcare tech firm Tempus (TEM) has taken investors on a ride this year, as excitement builds around AI-assisted medicine reshaping pharmaceutical care.
Despite a boom-and-bust first quarter, TEM stock has outpaced both the healthcare sector and the S&P 500 Index in 2025.
In the first six weeks of the year, shares of Tempus nearly tripled, climbing from around $33 to a high near $90 on Feb. 14.
The rally was fueled by Tempus’ partnership with the Institute for Follicular Lymphoma Innovation (IFLI) to develop targeted therapies, along with tailwinds from expected Trump-era deregulation in the pharmaceutical space.
But the rally didn’t last.
By late February, the stock had sharply corrected, falling more than 50%. Even so, TEM remains up 27% year-to-date — a standout against the S&P 500’s 8.8% drop and the healthcare sector’s flatline.
While volatility is likely to continue, analysts say Tempus is well-positioned for long-term growth as AI and healthcare increasingly intersect.
Analysts say best is yet to come
AI-enabled healthcare could become a $600 billion market by 2034, according to Precedence Research.
Another report from Scilife estimates AI could unlock more than $400 billion annually for pharmaceutical companies through cost reductions and faster trial timelines.
Whatever the exact figure, the consensus is clear: the sector is still in its early innings, giving companies like Tempus room to run.
Tempus already posted strong Q4 results, with revenue up 35.8% year-over-year to $200.7 million. Its genomics business brought in $120.4 million, up 30.6% from the previous year.
Those results gave management the confidence to project $1.24 billion in full-year revenue for fiscal 2025 — a 79% jump from last year. The company also expects to become profitable, with a conservative target of $5 million in adjusted EBITDA.
“We believe guidance for the year is appropriately set to be achieved and that Tempus has a very long revenue growth runway ahead of it,” wrote Andrew Brackmann, analyst at William Blair.
“We remain long-term believers in Tempus, its strategy and the market it operates in,” he added.
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