Goldman Sachs Assigns $75 Target to Tempus AI, But Data Business Faces Renewal Risks
Tempus AI (TEM) has received a neutral rating from Goldman Sachs with a price target of $75. While the firm's diagnostics segment shows strong growth and visibility—driven by rising oncology volumes and recent FDA approvals—the data and applications business faces uncertainty due to upcoming contract renewals over the next two years. The company extended its partnership with Recursion Pharmaceuticals through 2029, securing $42 million in committed payments. Meanwhile, diagnostics revenue rose 20% year-over-year to $289.3 million in Q2, and management anticipates additional growth from new FDA approvals that could add up to $85 million annually by 2027. Goldman Sachs highlights the risk of renewal for key data contracts despite strong performance—Data and Applications revenue grew 28% year-over-year with over $200 million in new licenses. Institutional investors like ARK Investment Management, Citadel, and Contrarius have increased their stakes, but short interest remains high at nearly 30% of the float.
Topics: Data business risk Diagnostics growth FDA approvals Goldman Sachs Tempus AI