We came across a bullish thesis on Tempus AI, Inc. (TEM) on Substack by Market Moves by GBC. In this article, we will summarize the bulls' thesis on TEM. Tempus AI, Inc. (TEM)'s share was trading at $50.77 as of Jan 29.
A doctor entering a patients results into a medical diagnostic computer.
Tempus, a company founded by Eric Lefkofsky in 2015, emerged from a personal journey when his wife was diagnosed with breast cancer. This experience highlighted a crucial gap in the healthcare system -- despite the advanced tools available to medical professionals, there was a lack of connection between patient data and clinical outcomes. Inspired by this, Lefkofsky's vision was to create a platform that would make medical tests "intelligent" by linking them to a vast database of patient outcomes, enhancing the ability to make informed healthcare decisions. Tempus has since evolved into a leader in the healthcare technology space, transforming the diagnostic and treatment process by integrating artificial intelligence (AI), massive data repositories, and advanced genomics.
The core mission of Tempus is to shift the focus of medical tests from static snapshots of a patient's condition to dynamic, data-driven insights. The company's genomics division goes beyond traditional testing by leveraging genetic information to provide actionable insights on treatments that have been effective for patients with similar genetic profiles. This combination of cutting-edge technology and vast data sets has enabled Tempus to become the largest cancer testing company in the U.S., partnering with more than half of the country's oncologists and reaching millions of patients.
A key differentiator for Tempus is its massive database, which includes over 200 petabytes of de-identified healthcare data, including clinical records, genetic profiles, and imaging data from millions of patients. This "medical brain" is continuously growing and being updated with millions of new tests, and it is powered by AI to provide real-time insights that doctors can use to make better treatment decisions. Tempus has achieved remarkable results, including a 96% match rate for patients to appropriate treatments and clinical trials, a significant improvement over traditional methods.
While oncology remains the company's focal point, Tempus has expanded its platform to other areas of medicine such as cardiology, neurology, and rare diseases. This expansion underscores the company's commitment to refining its diagnostic tests and remaining at the forefront of medical innovation. Tempus has also developed strong partnerships with over 2,400 hospitals and 19 of the 20 largest pharmaceutical companies, solidifying its role in both advancing clinical treatments and supporting drug development.