Tempus AI (TEM) stock surged 13.4% on Thursday, hitting a new 52-week high of $86. The upside came after the health technology company announced a collaboration with the Institute for Follicular Lymphoma Innovation (IFLI). Under this deal, TEM aims to develop treatments for follicular lymphoma (FL), a slow-growing cancer that affects the immune system. The impressive rally comes despite a recent rating downgrade from William Blair analyst Andrew Brackmann, citing concerns over the company’s current valuation.
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The partnership aims to create a data library within Tempus AI’s data analytics platform, Lens. This data library will help researchers derive AI-driven insights to speed up FL treatment development and improve patient outcomes.
It must be noted that the move is seen as a major step forward for the company, reflecting its growth potential in the precision oncology space. Further, TEM stock’s solid performance points to investors’ confidence in Tempus AI’s ability to use its AI technology for medical advancements.
Analyst Downgrades Rating on Valuation Concerns
Following the recent upside in TEM stock, Brackmann downgraded Tempus AI stock’s rating to Hold from Buy.
Brackmann noted that as of February 11, shares of the company are up 92% from their initial public offering price of $37 and have risen 111% year-to-date. He attributes this rally to investor enthusiasm over American politician Nancy Pelosi’s purchase of 50 call options in January, and the Trump Administration’s AI investment through the Stargate initiative.
However, Brackmann does not expect these updates to have a positive impact on Tempus AI’s financial outlook in the near term. Also, he stated that the shares are trading at or near fair value.
Is TEM a Good Stock to Buy?
Turning to Wall Street, TEM stock has a Moderate Buy consensus rating based on five Buys and two Holds assigned in the last three months. At $61.67, the average Tempus AI stock price target implies 26.36% downside potential.
