We recently published a list of 10 Stocks That Will Profit From AI. In this article, we are going to take a look at where Tempus AI, Inc. (NASDAQ:TEM) stands against other stocks that will profit from AI.
Artificial Intelligence (AI) is no longer a concept of the future but a real economic force influencing markets. By transforming corporate processes and enhancing manufacturing, AI is leading the way for efficiency, innovation, and profitability. The first-movers in this space who are developing, enabling, or adopting AI technologies are positioned to capitalize on a fast-growing economy.
AI has been quick to capture the markets and revolutionize industries. According to McKinsey’s 2024 Global AI Survey, the use of generative AI has skyrocketed. Now, 50% of businesses are leveraging its capabilities—a jump from just 33% in 2023. AI integration across business functions has also surged, with 72% of companies now deploying AI in at least one area. This surge is not just attributable to automation but also to redesigning workflows, enhancing productivity, and redefining the way industries function. The latest McKinsey Global Survey on AI showed that organizations are implementing strategies to boost their bottom line, redesigning workflows for generative AI deployment, and appointing senior leaders to oversee AI governance. Larger enterprises, particularly those exceeding $500 million in annual revenue, are leading the way, pivoting faster than their smaller counterparts in adapting to AI-driven efficiencies.
According to industry forecasts, the generative AI market is projected to expand from $40 billion in 2022 to a staggering $1.3 trillion by 2032. Thomson Reuters further reported AI’s impact on productivity, predicting that professionals could save up to 12 hours per week by 2029, owing to AI-powered automation. As AI continues to evolve, its influence is spanning across industries from finance to healthcare, making it an essential factor in investment strategies.
Big tech is doubling down on AI investments. One of the two major tech gaints has earmarked $80 billion for AI initiatives this fiscal year, while another one has committed up to $65 billion, demonstrating their long-term faith in AI’s profitability. Meanwhile, a major e-commerce and cloud services provider is making a bold move with a $53 billion investment in cloud computing and AI infrastructure over the next three years, surpassing its AI expenditures from the past decade. Gartner’s 2024 survey underscores AI’s expanding footprint, revealing that finance AI adoption has risen dramatically, with 58% of finance functions now utilizing AI—up 21 percentage points from 2023.
As AI continues to drive fundamental shifts in business operations and market strategies, investors must react with agile investment strategies. The AI landscape is no longer restricted to tech giants, but a broad spectrum of industries and companies are increasingly adopting AI into their core strategies. The next section looks at the ten best AI stocks that can capitalize on this AI revolution.
Our Methodology
For this list, we identify the stocks that will profit from AI by classifying them as AI Enablers (companies operating in developing AI models, chips, and cloud infrastructure) or AI Adopters (companies that are leveraging AI for efficiency and innovation). Stocks are filtered using AI-specific metrics across sectors like semiconductors, cloud computing, healthcare, and financial services. We have then ranked them according to their growth estimates for 2025 and hedge fund sentiments. We have used Insider Monkey’s Q4 2024 exclusive proprietary database of hedge funds to arrive at our rankings.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A scientist inspecting the growth of cells, in the process of drug discovery.
Tempus AI, Inc. (NASDAQ:TEM)
EPS next year: 133.41%
Number of Hedge Fund Holders: 17
Tempus AI, Inc. (NASDAQ:TEM) is a healthcare technology company that leverages artificial intelligence to advance precision medicine and patient care. Its offerings include next-generation sequencing diagnostics and polymerase chain reaction testing, serving healthcare providers, pharmaceutical companies, and researchers.
In Q4 2024, Tempus AI, Inc. (NASDAQ:TEM) reported a 35.8% year-over-year revenue increase to $200.7 million, with genomics revenue growing by 30.6% and data and services revenue by 44.6%. Gross profit rose by 49.7% to $122.1 million, and the company reduced its net loss to $13.0 million from $50.5 million in the same quarter the previous year. Adjusted EBITDA improved to a loss of $7.8 million compared to a loss of $35.1 million in Q4 2023.
In February 2025, Tempus AI, Inc. (NASDAQ:TEM) completed the acquisition of Ambry Genetics, enhancing its capabilities in genetic testing and data services.
Tempus’s stock has experienced significant volatility in 2025. After soaring 108% earlier in the year, shares declined by 15.1% to $59.10 following concerns about long-term growth prospects. Despite this, the stock remains approximately 45% above its initial public offering price since June, which makes it one of the best AI stocks to invest in.
Analyst consensus rates Tempus AI, Inc. (NASDAQ:TEM) as “Overweight,” with an average target price of $63.70 as of 25 March. The company’s full-year 2025 revenue guidance stands at $1.24 billion, including contributions from Ambry Genetics.
Overall, TEM ranks 8th on our list of stocks that will profit from AI. While we acknowledge the potential of TEM, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
