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Tempus AI Hits $100—Are Shares Due for a Pullback?
Written by Leo Miller. Published 10/15/2025.
Key Points
- Tempus AI has been one of the most talked about names to IPO in the past few years.
- The stock briefly soared above $100 and is still up more than 150% from its initial price.
- What's driving the stock's recent gains, and should investors worry about a larger correction in this name?
Tempus AI (NASDAQ: TEM) has been publicly traded for only 16 months, and it has been nothing short of a market standout. Compared with its IPO price of $37, Tempus shares were up about 155% as of Monday, Oct. 13. The stock topped $100 for the first time on Oct. 8 and reached a peak of $104 on Oct. 9 before settling near $94 on Oct. 13.
Below, we examine the recent developments that helped drive Tempus AI's stock, and — more importantly — analyze what may lie ahead. Is the rally overdone, or is there reason to expect further gains?
Device Clearances and President Trump's AI Cancer Order Send Tempus Higher
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Click here to stream The Final Displacement free todaySeveral key events have powered much of the recent upside in this healthcare stock. On Sept. 11, Tempus announced it received 510(k) clearance from the Food and Drug Administration (FDA) for its updated Tempus Pixel medical device. Pixel is an AI-powered cardiac imaging platform that provides numerical data about the condition of different heart tissues. Tempus says this quantitative data can help detect issues that may be hard to spot with a visual scan alone, and that Pixel's automated image reports can reduce the time clinicians spend on manual analysis. Tempus shares jumped nearly 14% on the news.
On Sept. 22, the company also received 510(k) clearance for its Tempus xR IVD device, which analyzes cancerous cells using RNA sequencing. Tempus hopes to sell this test to companies running oncology trials to help identify patients most likely to benefit from specific therapies. By better matching patients to treatments, drug developers may improve trial outcomes and increase the chances of approval. Tempus shares initially spiked on this announcement but finished the day lower.
Then, on Sept. 30, President Trump signed an executive order encouraging federal investment and programs to use AI against pediatric cancer. The order aligns with Tempus's mission and raised the prospect of government-related opportunities; Tempus later said on Oct. 9 that it was working with a U.S. government agency to support cancer research. The announcement helped lift shares that day, though they ultimately closed lower on the latter update.
Consensus Projects ~24% Downside in TEM; Recent Targets Offer Some Support
The MarketBeat-tracked consensus price target for Tempus sits just under $72, implying a potential decline of roughly 24% from recent levels. Recent analyst updates, however, are more constructive. HC Wainwright raised its target from $90 to $98 on Sept. 12, and Guggenheim boosted its target from $80 to $95 on Sept. 26. Those revised targets imply essentially flat to modest upside of 0%–4% from current prices.
While that limited upside is hardly exuberant, the upward revisions do provide some justification for the rally and suggest analysts are beginning to recognize the value of Tempus's recent clearances and business developments.
Multiple Factors Suggest Tempus May Be Overbought
Valuation metrics point to a potential overextension. Tempus trades at a forward enterprise value-to-sales (EV/S) ratio of about 12x — well above the roughly 6x forward EV/S average for large-cap U.S. life-sciences tools and services companies.
President Trump's executive order is a clear positive for companies working at the intersection of AI and oncology, including Tempus. Still, it's important to understand what FDA 510(k) clearance actually means: it certifies that a device is "substantially equivalent" to an existing device on the market, not that it is necessarily superior or uniquely effective. Tempus must demonstrate that its newly cleared products gain adoption and translate into meaningful revenue growth.
Given the rich valuation and modest Wall Street upside, the recent price action appears extended. Over the long term, Tempus has a credible growth opportunity — its current revenues are small relative to overall pharma R&D spending, which leaves room for expansion — but investors should exercise caution at these levels and weigh the risk of a pullback against the company's longer-term potential.
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