Google-backed Tempus AI Rises 9% on First Day of Nasdaq Trading

Tempus AI is a healthcare diagnostics company backed by Google that uses AI to improve how medical tests are interpreted. On its Nasdaq launch, the stock rose almost 9%, valuing the company at $6.65 billion.

The stock price of Tempus AI, a health care diagnostics business that uses AI to interpret medical tests to help doctors give better care to their patients, rose by as much as 15% in its first day on the Nasdaq Stock Market on Friday, when it went public under the symbol “TEM.”

It sold 11.1 million shares on Thursday for $37 each, which was the high end of its original target range of $35 to $37. The business raised $410 million at a value of just over $6 billion. At one point, the company was worth as much as $7 billion because of its early gains, but by the end of its first day of trading, it was worth only $6.65 billion, having gained nearly 9%.

Tempus thinks that AI can help doctors and patients choose the right medicine and make decisions about treatment. It made $531.8 million in sales but lost $214.1 million overall in 2023.

Tempus AI CEO Eric Lefkofsky said on CNBC’s “Squawk Box” Friday morning, before the stock market opened, “We’re on a really good trajectory.” “Since sales have been rising quickly, we’re not putting all of that extra money from the gross profit back into the business.” “Every quarter, we’re getting better leverage,” he said, adding that he thinks the business will be cash flow and EBITDA positive within a year.

Artificial intelligence and data analysis are two of the most well-funded tech ideas that Tempus AI is using to make the medical field better and more informed. The fact that early on in the COVID-19 spread there weren’t any diagnostic tests showed that even though our health care system is very old, it can still be unprepared for the future.

In its IPO filing, the Chicago-based company said that their goal is to find the real potential of precision medicine by developing Intelligent Diagnostics, which uses artificial intelligence (AI) in healthcare directly. Laboratory tests are more exact, personalised, and tailored with Intelligent Diagnostics because they use AI, including generative AI. Connecting lab results to a patient’s own health data makes tests smarter and more personalised.

As a result of the plague, the two-time CNBC Disruptor 50 company quickly released an at-home testing kit. However, Tempus is not just trying to solve a Covid problem. When Lefkofsky, who is also known for co-founding Groupon, heard that his wife had breast cancer, he got angry at the health care system and came up with the idea for Tempus. The main focus of the company is on oncology, and its genetic tests are meant to break down tumours at the molecular level and make treatment more specific for each person.