Tempus AI vs. Doximity: Which AI in Healthcare Stock is a Better Buy?

Artificial intelligence (AI) is rapidly being integrated into every domain of healthcare, giving birth to a new class of tech-driven innovators. Tempus AI TEM and Doximity DOCS stand out as emerging players in the AI health tech space. These two offer distinct approaches to innovation and market disruption.

Tempus AI is focused on leveraging AI-driven precision medicine, particularly in oncology and chronic disease management, while Doximity operates as a digital platform connecting medical professionals with tools for communication, telehealth and workflow efficiency. With both companies showing promise, the question arises: which stock is the better buy at this moment? Let's delve deeper.

3 Reasons to Be Bullish on Tempus AI

Revenue and Margins Expanding Together: Tempus AI ended 2024 on a high note, posting 35.8% year-over-year revenue growth in the fourth quarter. Even more impressive was the fact that its gross profit rose 49.7%, highlighting improving operational leverage. Its high-margin Data and Services business gained traction, supported by a 140% net revenue retention rate and $940 million in remaining contract value. Management sees this margin momentum as a lever to reinvest in technology, R&D and top-tier talent.

Acquisitions Reinforce Clinical and Data Infrastructure: Tempus AI’s 2025 acquisitions of Deep 6 AI and Ambry Genetics have expanded its clinical footprint to more than 750 sites and 30 million patients, while enhancing lab infrastructure and data depth-strengthening its precision medicine platform.

Positive EBITDA on the Horizon: Although fourth-quarter adjusted EBITDA was negative $7.8 million, it reflected a $27.3 million year-over-year improvement. With more than 25% overall business growth and an expected $5 million in positive adjusted EBITDA ahead, Tempus AI is trending toward long-term profitability. This reflects disciplined execution and cost management.

3 Reasons to Be Bullish on Doximity

Strong Financials With Scalable Margins: Doximity posted stellar third-quarter fiscal 2025 results, with revenues up 25% year over year, 10% above the guidance. The company raised full-year revenue expectations by $28 million, driven by robust pharma demand. Adjusted EBITDA hit a record $102 million with a 61% margin, up from 54% last year. With 93% adjusted gross margins and 30% growth in free cash flow, Doximity’s scalable model is clearly paying off.

Growing Engagement and Telehealth Strength: User engagement is increasing across all metrics, with over 1 million prescribers on the news feed and 610,000 using workflow tools. AI usage jumped 60% quarter over quarter. Doximity has been named Best in KLAS for telehealth for the fourth straight year and now supports over 250 hospital systems.

Expanding Market Share With Strong Outlook: As the healthcare provider (digital marketing space grows 5-7%, Doximity is positioned to outpace the market, thanks to high user engagement and deep product integration. The company expects 13% revenue growth in the fiscal fourth quarter and 19% for the full year, reinforcing its bullish trajectory.

Stock Performance & Valuation

TEM (up 24.6%) has outperformed DOCS (up 3.7%) over the past three months. Yet, in the past year, DOCS has rallied 99.3% compared with TEM’s 0.1% rise.

Meanwhile, Tempus AI is trading at a forward 12-month price-to-sales (P/S) ratio of 5.24, below its median of 8.49 over the last one year. Doximity’s forward sales multiple sits at 15.29X, above its last one-year median of 14.39X. Both Tempus AI and Doximity stocks appear pretty expensive when compared with the Medical sector average of 2.5X. Currently, DOCS and TEM stocks have a Value Score of D and F, respectively.

Comparing EPS Projections: Tempus AI & Doximity

The Zacks Consensus Estimate for TEM’s 2025 loss per share suggests a 63% improvement from 2024.

The Zacks Consensus Estimate for DOCS’ fiscal 2025 EPS implies an improvement of 37.9% over the previous fiscal.

DOCS Considered a Better Investment by Brokers

Doximity currently has an average brokerage recommendation (ABR) of 2.20 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 20 brokerage firms (Strong Buy and Buy, respectively, account for 35% and 10% of all recommendations.). An ABR of 2.20 indicates Buy.

Tempus AI currently has an ABR of 2.24 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 11 brokerage firms (Strong Buy and Buy, respectively, account for 27.27% and 18.18% of all recommendations).

Choose DOCS Over TEM Now

While both Doximity and Tempus AI are promising players in the digital health space, Doximity, a Zacks Rank #2 (Buy) stock, presents a more stable and financially sound investment opportunity at this stage. With strong profitability and margins along with consistently growing user engagement, Doximity offers a capital-efficient model that generates substantial free cash flow and delivers steady returns.

Tempus AI, a Zacks Rank #3 (Hold) stock, though rapidly growing and expanding its clinical footprint, is still in the investment phase. It is yet to report positive earnings. For investors seeking lower execution risk, financial predictability and a proven track record, Doximity emerges as a more compelling choice.

You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research