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 has quickly become a market standout. Compared with its IPO price of $37, Tempus shares were up about 155% on Monday, Oct. 13. The stock first eclipsed $100 on Oct. 8 and reached an intraday high of $104 on Oct. 9, before drifting back to close near $94 on Oct. 13.
Below, we’ll review the developments that have driven Tempus AI’s recent run-up and consider what the outlook may hold. Is this rally overdone, or is there reason to expect further gains?
Device Clearances and Trump’s AI Cancer Order Send Tempus Flying
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Several events helped drive the recent gains 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 health of different heart tissues. Tempus says that this quantitative output can help detect issues that might be missed by visual inspection alone, and Pixel automates image reporting to reduce the time clinicians spend on manual interpretation. 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 via RNA sequencing. Tempus intends to market the test to companies developing oncology drugs to help design better trials. RNA analysis can offer deeper insight into tumor biology in individual patients, which may help drug developers select patients more likely to benefit from an investigational therapy. Shares initially spiked on the announcement but finished the session lower.
Finally, on Sept. 30, President Trump issued an executive order urging federal agencies to increase investment in using AI to fight pediatric cancer. That move appears to have boosted Tempus shares by about 9% that day, as it aligns with the company’s mission and could open opportunities for government-related work. Tempus later said on Oct. 9 that it was collaborating with a U.S. government agency to support cancer research; shares closed lower on that announcement.
Consensus Projects Large Downside in TEM; Recent Targets Provide Some SolaceThe MarketBeat-tracked consensus price target on Tempus is just under $72, implying a potential downside of roughly 24% from recent prices. That outlook contrasts with some recent analyst revisions that are more encouraging. HC Wainwright raised its forecast from $90 to $98 on Sept. 12, and Guggenheim boosted its target from $80 to $95 on Sept. 26. Those updated targets imply anywhere from roughly flat to low-single-digit upside.
That range isn’t dramatic, but the higher analyst targets at least provide some support for the rally Tempus has already experienced and suggest analysts are beginning to recognize the potential from recent product clearances and partnerships.
Multiple Factors Point to Tempus Being OverboughtValuation metrics also raise caution. Tempus trades at a forward enterprise value-to-sales (EV/S) ratio of around 12x, well above the roughly 6x average forward EV/S of large-cap U.S. life sciences tools and services peers.
President Trump’s executive order is a clear positive for Tempus, but the magnitude of its benefit depends on how much demand the company can actually capture from the newly cleared devices and government programs. Importantly, 510(k) clearance indicates a device is “ substantially equivalent” to existing devices on the market; it does not necessarily mean the cleared product is superior or unique. Tempus still needs to demonstrate that these products will achieve clinical adoption and generate meaningful revenue.
Taken together — the high valuation and relatively conservative Wall Street forecasts — the recent rally looks extended. Over the long term, Tempus still has a plausible path to strong performance, given the relatively small size of its current revenues compared with overall pharmaceutical R&D spending and the potential addressable market. Still, investors should exercise caution and consider the risk of a pullback at current prices. |
