Tempus AI stock price remains in a deep bear market as investors worry that the hype that drove it to a record high was ending. The TEM stock initially peaked at $91.40 in February, and has now plunged to a low of $37.2, meaning that it has dropped by 60%. So, is it safe to buy the dip or wait for it to fall further?
Why Tempus AI has plunged
Tempus AI is one of the top American companies in the artificial intelligence space. Its goal is to help all players in the medical industry to simplify their operations, boost innovation, reduce costs, and grow sales.
The Tempus Platform comprises three key components, including Tempus Hub, Tempus Lens, and Tempus Lens. Tempus Hub is a platform that streamlines providers’ workflows and gives access to patient insights.
Lens is a platform that helps researchers to find, access, and analyze multimodal data and uncover crucial insights. Next is a tool that helps providers deliver the next steps in a patient’s care data.
Analysts believe that the medical industry is one of the best use cases for the artificial intelligence industry. It is primarily useful in research since large AI models can analyze vast data within minutes.
AI technology is also useful in areas like diagnostics and treatment. It generates results like DNA, RNA, clinical imaging, clinical EMR, and epigenetics.
Tempus AI business has grown rapidly in the past few years as more companies have embraced its technology. It is now used by some of the top companies in the healthcare industry like AstraZeneca, GlaxoSmithKline, BioNTech, Rain Oncology, and Kronos Bio.
TEM business is growing
The most recent results showed that Tempus AI business was growing. Its quarterly revenue rose by 35.8% YoY in the last quarter of 2024 to $200.7 million. Most of this revenue came from its genomics segment, which made over $120.4 million. The data and services segment rose to $80.2 million.
Most importantly, the company is making more strides to become profitable. Its gross profit rose by almost 50% to $122.1 million, while the net loss improved to $13 million, up from $50 million a quarter earlier.
The annual revenue jumped by 30% to $693 million, with its genomics business making over $451.7 million. The data and service segment rose to $241 million.
Analysts are optimistic that the Tempus AI business will continue doing well this year. The average estimate is that its first quarter revenue will be $248.8 million. Its annual revenue will be $1.24 billion, followed by $1.55 billion next year. The company will break even next year.
Analysts are highly bullish on the TEM stock, with the average estimate being $64.22, higher than the current $37.23.
Read more: Cathie Wood bets big on Tempus AI: Is it the next big thing in health-tech?
Tempus AI stock price analysis
TEM stock chart | Source: TradingView
The daily chart shows that the TEM share price has crashed in the past few weeks, moving from the year-to-date high of $91.40 to a low of $37.23. This price is along the ascending trendline that connects the lowest swing since June last year.
The stock has moved below the 25-day moving average. It has also moved slightly below the bottom of the trading range at $37.5. The Relative Strength Index (RSI) also dropped below the middle line at 50.
Therefore, the stock will likely continue falling as sellers target the key target at $25, the strong pivot, and reverse at $25. In the future, however, Tempus AI stock price will likely bounce back, and possibly retest its all-time high.
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