Wall Street Confident in Tempus AI's Diagnostic Prowess

Wall Street brokerages are optimistic about Tempus AI, a company backed by SoftBank Group, predicting growth due to its AI-powered clinical and molecular data library. The company offers genomic diagnostic tests in various medical fields. Major brokerages have given it a 'buy' rating, boosting its stock prices.

Wall Street brokerages initiated coverage of SoftBank Group-backed Tempus AI with a bullish outlook on Tuesday. Analysts are betting that the company's AI-driven clinical and molecular data library could lead to more advanced diagnostic and test kits.

The Chicago-based firm provides genomic diagnostic tests across oncology, neuropsychiatry, radiology, and cardiology, serving clinicians and hospital systems. Seven brokerages, including J.P.Morgan, Morgan Stanley, BofA Global Research, and Stifel, started coverage with a 'buy' or 'overweight' rating. TD Cowen has set the highest price target at $50.

Shares of Tempus rose by as much as 7% to $35.75 following the positive ratings, despite a 17.5% decline since its initial public offering (IPO) closing on June 14. J.P.Morgan predicts that Tempus will see around 33% revenue growth through 2027 and expects the company to achieve core profitability by the second half of 2025, even though the net loss widened to $289.8 million in 2023 from the previous year's $214.1 million. Total revenue surged by 65.8% to $531.8 million.