1. Tempus AI, Inc (NASDAQ:TEM)
YTD Performance: 164.93%
Number of Hedge Fund Holders: 7
Tempus AI Inc (NASDAQ:TEM) is a healthcare technology company that brings AI and machine learning to healthcare. The company provides next-generation diagnostics across various disease areas by employing technology capabilities. It leverages analytics and data to personalize medicine and has a product line spanning data, genomics, and AI applications. Tempus AI Inc (NASDAQ:TEM) focuses on building platforms for cardiology, oncology, infectious diseases, neuropsychiatry, and radiology.
On February 13, Tempus AI, Inc. (NASDAQ:TEM) announced a partnership with the Institute for Follicular Lymphoma Innovation (IFLI), a non-profit, private foundation focused on accelerating the development of innovative treatment options for patients with follicular lymphoma (FL). The partnership aims to develop targeted therapies for the disease by developing a real-world multimodal, de-identified FL data library in Lens, Tempus’ data analytics platform, through which researchers may derive AI-driven insights to accelerate the development of FL treatments and improve patient outcomes. The development of this follicular lymphoma data library holds the potential to expand understanding of the disease’s biology.
The company also has solid operations and reported a revenue of $693 million for the full year 2024, a 30% growth year-over-year. Last month, Tempus AI, Inc. (NASDAQ:TEM) launched a new xT CDx, an FDA-approved Next-Generation Sequencing in vitro diagnostic device available to all healthcare professionals nationwide. xT CDx offers one of the most comprehensive gene panels available and examines 648 genes to identify solid tumors. It also offers crucial insight to support treatment decisions for colorectal cancer patients.
Baron Discovery Fund stated the following regarding Tempus AI, Inc (NASDAQ:TEM) in its Q3 2024 investor letter:
“Shares of Tempus AI, Inc (NASDAQ:TEM) contributed to performance. Tempus is a cancer diagnostics company that provides genomic testing results. Tempus has also amassed an over 200 petabyte proprietary multimodal dataset that combines clinical patient data with genomic testing data. In addition to using this data to empower more intelligent diagnostics for its own tests, Tempus also licenses this data to biopharmaceutical companies which use it to design smarter clinical trials and identify potential new drug targets. We think this proprietary dataset is unique with meaningful barriers to entry, and brings meaningful value to biopharmaceutical R&D. As we mentioned in the letter from last quarter, shares have been incredibly volatile. We took advantage of this volatility to buy a meaningful position when shares sold off into the low $20’s per share from an IPO price of $37. When shares spiked into the mid-$70’s (likely due to short sellers covering losses as shares rose), we took profits on a meaningful portion of the investment as we believed valuation had become stretched (shares now trade in the high $40’s to low $50’s level). We like our position sizing now, and would add to the position at lower valuations. We believe that Tempus has significant growth ahead of it and we are excited about its unique business model.”
Overall, TEM ranks first among the 10 best performing healthcare stocks so far in 2025. While we acknowledge the potential of healthcare stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TEM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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