Tempus AI Is Skyrocketing Today -- Is the Stock a Buy Right Now?

Amid a bullish backdrop for the broader market, Tempus AI (NASDAQ: TEM) stock is posting big gains Wednesday. The company's share price was up 15.8% as of 1:45 p.m. ET. At the same point in time, the S&P 500 was up 2.1%, and the Nasdaq Composite had risen 2.8%.

Investors are having a strong positive reaction to news that the Trump administration is apparently interested in getting a trade deal done with China and lowering tariffs in the not-too-distant future. In addition to buying momentum that's lifting valuations across the broader market, Tempus AI stock is climbing thanks to news that the company has formed a new partnership with AstraZeneca and Pathos AI. The team-up will see the trio of companies working to build an artificial intelligence (AI) model for oncology that can help generate clinical insights, aid in the discovery of new drug targets, and help develop treatments.

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Is Tempus AI stock a buy right now?

Against the backdrop of an 8% decline for the S&P 500, Tempus AI has managed to rocket 48% higher across 2025's trading. As an early, specialized leader in healthcare AI software, the company has plenty of long-term promise -- but its valuation profile also comes with significant risk.

The company's revenue increased 30.4% annually last year to reach $693.4 million, and its 55% gross margin in the period looks promising for a business that could still be in very early scaling stages. On the other hand, the company seemingly has a long way to go before shifting into profitability and recorded a net loss of $705.8 million last year. With a market cap of roughly $8.7 billion, Tempus AI is valued at approximately 12.6 times last year's sales.

The business has huge expansion potential and will likely continue to serve up very strong revenue growth this year, but its heavily forward-looking valuation suggests the stock is probably only a good fit for investors with high risk tolerance. If you're interested in building a position in this AI healthcare software pure play, I would recommend dollar-cost averaging into the stock due to the potential for macroeconomic and geopolitical developments to spur continued volatility for the market in the near term.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends AstraZeneca Plc. The Motley Fool has a disclosure policy.