Tempus AI Stock Surges 82.4% in a Year: What's Driving It?

Tempus AI TEM has shown impressive momentum in the past 12 months, with its shares rising 82.4%. This has significantly outperformed the industry, which grew 2.6%, as well as the S&P 500 composite, which rose 19.3% during the same period.

Currently carrying a Zacks Rank #3 (Hold), the renowned healthcare technology company is showing strong Genomics momentum with a scaling Data business and an expanding AI toolkit. The company reached a key milestone by becoming profitable on a non-GAAP basis, with management focusing on disciplined MRD expansion and long-term growth. Its portfolio now spans oncology therapy selection, hereditary testing and MRD. 

Tempus aggregates and structures multimodal data from clinical care and laboratory testing and provides AI-enabled solutions to physicians, researchers, payers, and biopharmaceutical companies. The company’s operating model spans two revenue lines – Genomics and Data and services. Within the Genomics segment, the company provides oncology and hereditary testing. Within Data and services, the company commercializes de-identified datasets, clinical trial services and related analytics for life sciences partners.

Tailwinds Behind TEM Stock Surge

The rally in the share price can be linked to the company’s Genomics segment’s sustained growth. Through the first nine months of 2025, Genomics revenues more than doubled year over year on higher oncology volumes and the addition of Ambry hereditary testing.  In the third quarter of 2025, total genomics testing volumes increased 33% year over year, driven by 27% volume growth in oncology and 37% in hereditary testing. Sales force efficiency improved after integrating Ambry’s portfolio. 

In September 2025, the company received FDA 510(k) clearance for its xR IVD to support life sciences drug development programs. It also launched xM for Treatment Response Monitoring (“TRM”), a new liquid biopsy assay designed to track tumor fraction changes in patients undergoing immune-checkpoint inhibitor (ICI) therapy. 

Meanwhile, Tempus’ Data & Services business is emerging as a high-margin and scalable revenue stream beyond traditional genomic testing. Data and Services revenues grew 26.1% year over year, driven primarily by Insights (data licensing). The company further strengthened its data and AI capabilities through the acquisition of Paige, an AI leader in digital pathology, enhancing its dataset, technical expertise and footprint in this emerging field.

For the first time, Tempus reported positive adjusted EBITDA of $1.5 million in the third quarter — a landmark achievement after a decade of effort. During the third-quarter earnings call, Tempus highlighted ongoing cost discipline and efficiency efforts that helped expand margins. 

What Ails TEM Stock?

Although Tempus has developed and published several advanced AI-driven diagnostic algorithms, the absence of reimbursement frameworks for such tools within the U.S. healthcare system poses a significant structural hurdle. Due to this, the company’s AI business looks promising but unlikely to generate large revenues in the near term until payers adopt consistent reimbursement policies. 

Tempus’ average reimbursement was approximately $1,600 per test in the third quarter, well below parity with peers. Management believes that continued FDA approvals and the shift of tests into ADLT status should help improve reimbursement over time.

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A Glance at Estimates for TEM

The Zacks Consensus Estimate for Tempus’ 2025 and 2026 loss per share (EPS) is expected to improve 59.5% and 71.6% year over year, respectively, to $64 cents and $18 cents. In the past 30 days, the Zacks Consensus Estimate for the company's 2025 loss per share has moved north 1 cent. 

Revenues for 2025 are projected to grow 82.3% to $1.26 billion, while the same for 2026 is expected to reach $1.56 billion, implying a 23.4% increase.

Key Picks

Some better-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Charles River Laboratories International CRL and Quest Diagnostics DGX.

Phibro Animal Health has an earnings yield of 7.2% compared with the industry’s 2.5% yield. Shares of the company have surged 92.1% in the past year against the industry’s 3.8% decline. PAHC’s earnings outpaced estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 20.8%.

PAHC carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Charles River Laboratories, carrying a Zacks Rank #2, has an earnings yield of 5% compared with the industry’s 4.1% yield. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 12.4%. CRL shares have surged 14.7% compared with the industry’s 6.8% growth in the past year.

Quest Diagnostics, carrying a Zacks Rank #2, has an earnings yield of 6% compared with the industry’s 5.6% yield. Shares of the company have jumped 13.9% compared with the industry’s 5.2% growth. DGX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 2.5%. 

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

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