Has Tempus AI (NASDAQ: TEM) Found New Support?

Tempus AI's stock (NASDAQ: TEM) has treated holders to a whirlwind start to 2025, with the first quarter yet to be completed, TEM has seen more than a double up (+160%) into mid Feb, before falling back 52%. Now with a two day bounce that has added 18%, we are left wondering whether the stock has found new support at the $42 level, or whether this might be more of a ‘dead cat bounce‘.

Taking a look at the 6 month chart, and there is a previous faded rally in November that fell more than 50% from peak to trough, so this is not new territory for long term holders. The stock dropped by 17% following the release of their fourth-quarter earnings (Feb 24), but by then, the stock had already begun to pull back from highs, down some 22%. The pullback then cannot be entirely laid at the foot of fundamentals, but in part in sympathy with markets, and a switch from momentum and a more risk off attitude at the time.

Taking a look at recent results, and Tempus AI reported an adjusted net loss of $0.18 per share for the fourth quarter, missing analysts’ expectations by $0.02 per share. Despite a 36% increase in revenue compared to the previous year, totaling $200.7 million, the revenue figure was below anticipated levels. Within its business segments, the genomics unit experienced a revenue growth of over 30%, reaching $120.4 million, while the data and services segment saw an increase of nearly 45%, totaling $80.2 million.

The company’s non-GAAP operating expenses were reported to have grown by 6.5% to $142.5 million. CEO Erik Lefkofsky and CFO Jim Rogers identified the expansion of the salesforce and research and development staff as key contributors to the increased expenses.

The stock has rallied from the lows of last week, although whether this can be sustained is another question. The $50 level is the next one that needs to go, and from there, bulls can start looking at $52.50, $55 and beyond for confirmation. Volume should be considered, as any attempt to rally without sufficient weight could well break down.

Despite the recent downturn in share prices, Tempus AI shares have only been on the market less than 12 months, so any further support/resistance levels will become clearer in time. Overall, while Tempus has demonstrated significant growth in its revenues, the market appeared focused on the higher costs and lower-than-expected guidance that contributed to the decline in share value post earnings. Market sentiment, and a push back into perceived risk assets and growth names could help TEM, but keep an eye on any signals of a breakdown.