Tempus AI or NVIDIA: Which is the Smarter Bet in AI-Backed Healthcare?

Tempus AI TEM and NVIDIA NVDA are both actively working at the intersection of AI and healthcare. Tempus AI, while advancing precision oncology through AI-driven diagnostics and a landmark $200 million foundation model deal with AstraZeneca AZN and Pathos, reported 75% year-over-year revenue growth in the first quarter of 2025.

Meanwhile, NVIDIA continues to lead the field of AI infrastructure, expanding its healthtech footprint with platforms like Clara and new drug discovery partnerships with Novo Nordisk NVO and DCAI. As Tempus AI builds on NVIDIA’s niche technological developments, investors must ask, which is the better long-term bet in AI-powered healthcare? Let’s find out.

Year to date, shares of Tempus AI have surged 91.8%, handily outperforming NVIDIA’s 29.2% gain. This outsized growth reflects investor confidence in the company’s differentiated value propositions and long-term potential in a rapidly digitizing healthcare environment.

Factors Driving Tempus AI

Tempus AI’s growth is being fueled by strong momentum across its core genomics and data businesses. In the first quarter, the company recorded a 75% year-over-year revenue increase driven primarily by an 89% jump in genomics revenues. Oncology testing, the company’s legacy clinical diagnostics business, grew 31%, while hereditary testing, inherited from the Ambry Genetics acquisition, saw 23% unit growth. Tempus is also making rapid strides in the data and services segment, which rose 43% year over year in the first quarter, led by its high-margin Insights business that licenses real-world clinical and molecular data to biopharma.

Tempus AI also stands out for its shift from diagnostics to building large-scale AI models, aiming to become a leading AI platform in oncology. Its $200 million, three-year partnership with AstraZeneca and Pathos to create the world’s largest oncology foundation model is a major milestone. The deal boosts data licensing revenues while sharing compute costs, making the effort more efficient. With over 300 petabytes of clinical data and $1 billion in contract value, Tempus is well-positioned to expand its role in drug discovery, diagnostics and clinical decision-making.

NVIDIA's Progress in Healthcare

NVIDIA is rapidly transforming the healthcare and pharmaceutical landscape through strategic partnerships, AI infrastructure and new generation AI technologies. Collaborating with industry giants like Novo Nordisk and research organizations such as DCAI, NVIDIA is helping accelerate drug discovery by deploying high-performance platforms like the Gefion supercomputer and BioNeMo for generative biology. These collaborations enable advanced simulations, agentic AI workflows and large-scale biomedical language model training.

Startups like Teton and Basecamp Research, along with global pharma leaders such as IQVIA, are using NVIDIA's AI factories and microservices to revolutionize patient care, clinical trial management and pharmaceutical development, showcasing real-world gains like reduced nurse workloads and 17 times faster genomic analysis.

Moreover, NVIDIA is helping tackle Europe’s healthcare challenges like staffing shortages, aging populations and treatment delays through AI-based initiatives. UK-based PATH uses conversational agents to reduce care waitlists, while Pangaea Data leverages NVIDIA’s NeMo toolkit to detect hard-to-diagnose diseases. At the infrastructure level, Foxconn and GE Healthcare are deploying NVIDIA-driven robotics and digital twins to build smarter hospitals and accelerate device development.

Comparing Valuation: TEM is Attractively Valued Than NVDA

Tempus AI is trading at a forward 12-month price-to-sales (P/S) ratio of 7.84, below its median of 8.11 over the last year. NVIDIA’s forward sales multiple sits at 18.96, above its last one-year median of 17.81.

Average Target Price for TEM and NVDA Suggest Upsides

Based on short-term price targets offered by 10 analysts, TEM’s average price target represents an increase of 5.3% from the last closing price of $63.34.

Based on short-term price targets offered by 43 analysts, NVIDIA’s average price target represents an increase of 5.1% from the last closing price of $173.74.

Final Take

Both Tempus AI and NVIDIA currently carry a Zacks Rank #3 (Hold), reflecting solid but balanced near-term outlooks within the AI in health tech niche. At present, Tempus stands out with stronger year-to-date gains, faster revenue growth, expanding AI partnerships and a more attractive valuation. While NVIDIA plays a critical role in powering healthcare AI infrastructure through platforms like Clara and BioNeMo, its higher valuation limits near-term upside. Given current price targets, Tempus AI may offer a better short-term opportunity in the AI-health tech space. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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