We came across a bullish thesis on Tempus AI, Inc. on R. Dennis’s Substack by OppCost. In this article, we will summarize the bulls’ thesis on TEM. Tempus AI, Inc.’s share was trading at $51.40 as of March 3rd. TEM’s trailing P/E was 39.30 respectively according to Yahoo Finance.
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Tempus AI (TEM) represents a unique long-term growth opportunity at the intersection of oncology, data compounding, and artificial intelligence. The company is building the world’s largest library of clinical and molecular data, sequencing tumors and linking genomic information to longitudinal clinical records.
This creates a powerful data flywheel: as more oncologists use Tempus, the database expands, improving AI-driven insights, which in turn increases the value of the platform to pharmaceutical companies seeking to accelerate drug discovery.
Recognizing this compounding potential, we strategically sold 1,500 January 2027 $50 put contracts at $8.35, effectively setting a target entry price of $41.65, which provides a significant margin of safety relative to current valuations.
This approach allows us to capture the long-term upside of owning a dominant data-driven platform without being subject to short-term volatility. Tempus’ model is designed for decades of intrinsic value growth, with applications in pathology and cardiology poised to move from experimental to industry standard, positioning the company as a generational asset in healthcare AI.
While the business is still in a high-burn growth phase and subject to regulatory uncertainties, selling puts ensures that ownership occurs only at an attractive risk-reward point. If the stock remains above $50, the collected premium enhances returns; if it falls below, we acquire the company at a substantial discount while gaining exposure to a robust data moat.
This disciplined, patient approach exemplifies how to strategically enter high-quality compounding businesses, capturing both time value and long-term value creation, while mitigating downside risk and aligning with a philosophy of building a portfolio of enduring “machine” assets.
Previously, we covered a bullish thesis on Tempus AI, Inc. (TEM) by Oliver | MMMT Wealth in April 2025, which highlighted TEM’s strong 2-year revenue and EBITDA growth projections of over 20%, its diversified health tech operations, and an attractive valuation at 6x NTM sales. TEM’s stock price has appreciated by 18.89% since our coverage. OppCost shares a similar view but emphasizes the company’s data flywheel, long-term compounding potential, and the strategic use of put options to define an attractive entry price.
