Mizuho has initiated coverage of Tempus AI Inc (NASDAQ: TEM) with an Outperform rating and assigned a price target of $100.00. At the time of Mizuho's call, that target implies approximately 78% upside relative to a quoted price near $56.16, and remains below the equity's 52-week peak near $104.32.
The research note frames Tempus AI as a front-runner in precision oncology diagnostics and in AI-enabled healthcare data services. Mizuho characterizes Core Precision Oncology diagnostics as among the most attractive healthcare end markets, estimating a total addressable market in excess of $40 billion and a sustainable growth trajectory above 30%.
Data from InvestingPro referenced in the coverage shows Tempus AI delivered robust top-line momentum, with revenue growth of 72.6% over the last twelve months. Analyst consensus cited by the same source anticipates continued sales expansion through the current year.
Mizuho points to specific product leadership when assessing Tempus AI's competitive positioning. The firm notes the company's xT test as holding a leading share in tissue-informed Comprehensive Genomic Profiling. It also highlights the xM product as a platform for potential expansion in Minimal Residual Disease applications, as liquid biopsy methodologies gain clinical and commercial traction.
On valuation methodology, Mizuho's $100 price target is derived from a blended approach combining EV/sales multiples, discounted cash flow analysis, and sum-of-the-parts work. The firm states the target does not incorporate potential upside to its own estimates. Despite the upside implied by Mizuho's target, InvestingPro's Fair Value assessment cited in the coverage indicates the stock may be overvalued at current market levels.
Product and clinical news are cited alongside the coverage initiation. Tempus AI recently introduced an algorithm named HRD-RNA, a 1,660-gene logistic regression model intended to identify patients who could benefit from platinum-based chemotherapy or PARP inhibitors by analyzing gene expression patterns rather than structural DNA damage. The company also launched Paige Predict, a digital pathology solution that predicts biomarkers from H&E whole slide images to assist clinicians when tissue is limited.
Separately, a clinical validation reported for Tempus AI's Immune Profile Score (IPS) test showed it more accurately predicted patient outcomes for immunotherapy treatments compared with traditional biomarkers, according to the same reporting. In addition to Mizuho's initiation, Baird has also initiated coverage with an Outperform rating and set a price target of $59.00.
Taken together, the coverage and product announcements underscore Tempus AI's continued activity in precision medicine and cancer diagnostics. While Mizuho's initiation signals confidence in the company's market opportunity and growth prospects, the divergence between the broker's optimistic target and third-party fair value metrics highlights differing views on the current price level.
Sector impact: The developments are most directly relevant to the healthcare sector, specifically diagnostics, precision oncology, and health technology services markets. Equity markets for healthcare names and investors focused on high-growth diagnostics businesses may be influenced by the new coverage and accompanying valuation debate.