12 Best AI Stocks to Invest in According to Reddit

10. Tempus AI Inc. (NASDAQ:TEM)

Number of Hedge Fund Holders: 17

Tempus AI Inc. (NASDAQ:TEM) is a healthcare technology company that uses AI to revolutionize patient care. It provides advanced genomic sequencing and data analysis. It also offers AI-driven platforms like Insights, Algos, and Lens, to help healthcare providers, pharmaceutical companies, and researchers utilize vast datasets for personalized medicine and clinical trial optimization.

The company’s Data and Services segment showed strength in Q4 2024 and boosted the company’s overall revenue growth to 35.8% year-over-year. The segment’s strength is centered on AI-powered data analysis and delivery and directly resulted in a record $940 million in total remaining contract value and a 140% net revenue retention. This success prompted the company to increase its 2025 revenue guidance to $1.24 billion. The five-year extension of its Google agreement further supports AI development.

TD Cowen’s Daniel Brennan reiterated a Buy rating on Tempus AI Inc. (NASDAQ:TEM) on February 24, while setting a $74 price target. This was driven by the company’s growth forecast, which includes higher-than-anticipated 2025 revenue, strong AI-powered Insights pricing, and a strategic shift towards higher-value genomic testing, all of which is supported by an expanded sales team.

Baron Discovery Fund profited from Tempus AI Inc.’s (NASDAQ:TEM) volatility and recognized its unique dataset and growth potential. Here’s what the fund stated 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.”