Tempus AI Crushes Q2 Estimates with 90% Growth, But Wall Street Cautions on Near-Term Upside

CHICAGO, IL – Tempus AI Inc. (NASDAQ:TEM), a standout in the healthcare technology sector, delivered a powerful second-quarter earnings report that handily beat Wall Street expectations, fueling a stock performance that has already seen an 89% return for investors in 2025.

The artificial intelligence and data-driven medicine company reported stellar Q2 results, showcasing accelerating demand and significant progress toward its goal of achieving profitability this year.

In the second quarter of 2025, Tempus generated nearly $315 million in revenue, representing a massive 90% growth rate year-over-year. This result solidly surpassed analyst forecasts, which had anticipated growth of around 79%. The company also posted a narrower-than-expected adjusted loss per share of 22 cents.

Profitability metrics showed marked improvement across the board. The company’s adjusted gross margin expanded to 62.8%, up from 61.4% in the previous quarter and 56.8% in the same period last year. Its adjusted EBITDA margin improved dramatically to -1.8%, a significant step up from -18.8% in Q2 2024.

Buoyed by the strong performance, Tempus raised its full-year revenue guidance to $1.26 billion and reaffirmed its target to generate $5 million in positive adjusted EBITDA in 2025—a major milestone compared to its $110 million adjusted EBITDA loss in 2024.

Q2 2025 Financial Highlights:

• Revenue: ~$315 million (90% year-over-year growth)

• Adjusted Gross Margin: 62.8%

• Adjusted EBITDA Margin: -1.8%

• Updated 2025 Revenue Guidance: $1.26 billion

Wall Street Weighs In: Upside May Be Limited

Despite the blowout quarter, Wall Street analysts suggest that after its tremendous run, the stock may have limited room to climb in the immediate future.

Following the report, Morgan Stanley raised its price target on Tempus from $65 to $68. However, with the stock closing at over $66 on August 12, the average analyst price target implies little to no short-term upside. Even more bullish recent targets average around $68.60, suggesting just over 3% potential gain from current levels.

This valuation leaves the stock vulnerable to pullbacks. Investors may recall that shares plummeted 15% in a single day after the company reported very slight earnings misses in Q4 2024, highlighting the market’s high expectations.

Long-Term Opportunity Remains Vast

While the near-term outlook may be tempered, the long-term bull case for Tempus AI remains compelling. The company operates in a massive market, using its AI platform to enhance research and development for pharmaceutical and biotech companies.

According to one study, total R&D spending in the sector was $276 billion in 2021. Tempus’s projected 2025 revenue of $1.26 billion represents a tiny fraction of this total addressable market, signaling a vast runway for sustained, long-term growth as more companies adopt its solutions.

For now, investors will be closely monitoring whether Tempus can continue its flawless execution and capitalize on this significant opportunity in a profitable and sustainable way.