Why Tempus AI Inc. (TEM) Went Up on Wednesday

We recently compiled a list of the 10 Companies Jump on Better Earnings, Outlook. In this article, we are going to take a look at where Tempus AI Inc. (NASDAQ:TEM) stands against the other stocks.

The stock market extended its winning streak on Wednesday, closing firmer as investors seemed to have already priced in the news of tit-for-tat tariffs and uncertainties surrounding the Artificial Intelligence industry.

The Dow Jones gained another 0.71 percent, the S&P 500 grew 0.39 percent, and the tech-heavy Nasdaq increased by 0.19 percent.

Ten companies traded in line with the broader market sentiment, mostly on the back of record achievements in their latest earnings performance and optimistic outlook guidance.

To come up with Wednesday’s top gainers, we considered only the stocks with at least $2 billion in market capitalization and $5 million in daily trading volume.

A computer screen showcasing Artificial Intelligence and Machine Learning algorithms at work.

Tempus AI Inc. (NASDAQ:TEM)

Shares of Tempus AI Inc. surged by 11.85 percent on Wednesday to end at $69.18 apiece after earning an upgraded outlook from an investment banking firm.

On Wednesday, TD Cowen reiterated its buy rating for Tempus AI’s shares, while increasing the price target to $74 after the company successfully closed its acquisition of Ambry Genetics, a deal that the investment research firm believes would position the company for more product offerings and entry into new markets.

Tempus AI acquired Ambry Genetics for $600 million, of which $375 million was paid in cash, and worth $225 million in shares. Of the latter, $100 million will be subject to a one-year lock-up agreement following the transaction.

With Ambry Genetics able to make $300 million in revenues, the acquisition was seen as a strategic move that would enable the company to achieve positive free cash flow moving forward.

Overall TEM ranks 5th on our list of Wednesday’s top gainers. While we acknowledge the potential of TEM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. 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.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.