As disruption remains the name of the game in the artificial intelligence (AI) world, any conversation not involving Cathie Wood would remain incomplete. Known for making outsized bets on disruptive companies that are focused on revolutionary technology, her flagship ARK Innovation ETF (ARKK) has been a hit among investors preferring exposure to innovation.
To that end, 2025 has seen the celebrity fund manager loading up on the shares of an AI-driven health-tech company. Notably, Wood is bullish to such an extent about the company that it has become one of the ARKK ETF’s top 10 holdings.
So, what is the company all about and is Wood’s optimism about it warranted or misplaced? Let’s find out.
About Tempus AI Stock
Founded in 2015, Tempus AI (TEM) is a health technology company specializing in leveraging AI to advance precision medicine, focusing on areas such as oncology, cardiology, and neurology. Tempus also offers genomic diagnostics and AI-driven data solutions to personalize patient care. Its market capitalization currently stands at $8.2 billion.
TEM stock, which is up 45% on a year-to-date basis, saw its shares being bought heavily by two of Wood’s funds. In January 2025, ARKK added to its earlier position in the company by acquiring 439,536 shares while the ARK Genomic Revolution ETF (ARKG) also increased its holdings, purchasing an additional 179,255 shares during the same period.
Overall, TEM occupies a 3.5% weight with a value of about $221 billion in ARKK while it has a weight of 5.74% and a value of about $69.2 billion in the ARK Genomic Revolution ETF.
Financials
Tempus’ results for the most recent quarter saw the company reporting an increase in revenue along with narrowing losses. Net revenues for the quarter came in at $180.9 million, up 33% from the previous year as both the Genomics ($116.4 million, +20.3% YOY) and Data and Services ($64.5 million, +64.4% YOY) segments witnessed a rise. Losses narrowed to $0.46 per share from $1.03 per share in the year-ago period.
The cash flow situation improved with net cash used in operating activities coming at $149.8 million compared $174.1 million in the year-ago period. Overall, the company closed the quarter with a cash balance of $388 million, much higher than its short-term debt levels of $54.9 million.
Further, the company announced the acquisition of hereditary cancer screening leader Ambry for $625 million. The company asserted that with Ambry in its portfolio, it will have access to expanded testing capabilities for inherited cancer risk in areas such as rare disorder, pediatrics and cardiology.
Strategic Drivers
Tempus’ AI-enabled diagnostic platform has positioned the company as a frontrunner in the competitive U.S. healthcare sector. By collaborating with over 2,500 institutions, Tempus collects real-time clinical data on millions of cancer patients, enabling improved treatment matching and advancing clinical research. Its contract research organization, Tempus Compass, further strengthens its role in facilitating late-stage clinical trials, underscoring its integrated approach to precision medicine.
The company’s AI-driven offerings are categorized into three core products: Genomics, Data, and Applications. The Genomics product leverages Tempus’ AI to conduct diagnostic tests that match therapies and evaluate treatment outcomes for similar patient profiles, with revenues generated through insurance billing or direct payment from payers. The Data product licenses Tempus’ extensive datasets to biopharma partners and identifies suitable patients for clinical research projects, while the Applications platform links providers to patients for clinical trials in real time and addresses care gaps to ensure optimal therapeutic interventions. Together, these products form a comprehensive ecosystem that integrates diagnostics, data analytics, and clinical applications.
Notably, Tempus recently announced significant milestones, including the renewal of a three-year data licensing contract with Merck (MRK) and the expansion of its collaborations with Takeda (TAK) and BioNTech (BNTX), resulting in a total contract value exceeding $900 million. The company’s commitment to growth is evident as it bolsters its sales force with the addition of 60 new representatives, enhancing its market reach and customer engagement. Tempus is also advancing its AI applications, including the recently updated Tempus One, now equipped with a generative AI assistant that is designed to streamline the clinical experience and improve patient care outcomes.
Over time, Tempus aims to use the data generated from its AI applications to develop large language models, further monetizing its Data and Services segment. By building a scalable and proprietary platform that generates multimodal datasets, Tempus is creating a robust data ecosystem that benefits from network effects. This ecosystem not only enhances its competitive position, but also establishes a significant barrier to entry, providing the company with a durable competitive moat in the rapidly evolving healthcare technology landscape.
Analyst Opinions on TEM
Analysts have deemed the stock a “Moderate Buy” with a mean target price of $57.89, which denotes upside potential of about 11.6% from current levels. Out of 10 analysts covering the stock, five have a “Strong Buy” rating, two have a “Moderate Buy” rating and three have a “Hold” rating.
