Assessing the Bearish and BULLISH Options Activity in Tempus AI (TEM) as a Precursor to Earnings and Price Volatility

The options market has long served as a barometer for investor sentiment, offering insights into expectations for corporate earnings and stock price movements. For Tempus AI (TEM), a biotech firm leveraging artificial intelligence in genomic analysis, recent options trading activity reveals a complex interplay between bearish and bullish positioning. This analysis examines how these dynamics might inform near-term price volatility and earnings-related outcomes, drawing on both current data and historical patterns.

Bearish Sentiment Dominates Pre-Earnings Activity

Deep-pocketed investors have recently exhibited a pronounced bearish stance toward TEM, as evidenced by unusual options trading. Large institutional players have executed significant put option trades, with strike prices ranging from $35.00 to $95.00 and total notional values exceeding $132,000 and $36,600 according to Benzinga. According to Benzinga, 55% of notable options activity in recent weeks has leaned bearish, reflecting concerns about near-term fundamentals. These trades suggest a price range expectation of $20.00 to $100.00 over the next three months, with key support levels targeted at $35.00 and $63.00 as reported by Nasdaq.

The bearish bias is further underscored by specific trades, such as a $132,660 put sweep with a $35.00 strike price expiring on June 18, 2026, and a $40,000 put trade at $63.00 expiring on January 16, 2026 according to Benzinga. These positions imply that investors are hedging against downside risk or outright shorting the stock ahead of the next earnings report, projected for late January to mid-February 2026.

Historical Context: Mixed Signals from Options Sentiment

While current bearish activity is striking, historical data reveals a less consistent relationship between options sentiment and TEM's post-earnings performance. Over the past year, the stock has declined in the immediate aftermath of four out of six earnings reports, averaging a -2.7% drop. However, the put/call ratio-a key metric for gauging market bias-has remained below 1, at 0.62, indicating a net bullish outlook according to Fintel. This apparent contradiction highlights the volatility inherent in TEM's stock, which has surged 82.09% year-to-date despite a recent 18% pullback as reported by Nasdaq.

The most recent earnings report on November 4, 2025, exemplifies this dissonance. While TEM exceeded expectations (actual EPS of -$0.11 vs. estimated -$0.25), the stock fell 2.6% post-announcement, far below the implied volatility of ±11.63% predicted by options traders according to MarketChameleon. This "volatility crush" underscores the risks of relying solely on options data for predictive accuracy, as market reactions can be influenced by broader macroeconomic factors or sector-specific news.

Bullish Undercurrents and Strategic Considerations

Despite the bearish overhang, bullish signals persist. The Open Interest (OI) Put/Call Ratio of 0.62 suggests that more call options are in play than puts according to Fintel, and historical data shows that TEM's stock has occasionally outperformed expectations following earnings. For instance, the company's second-quarter 2025 results included an 89.6% year-over-year revenue increase to $314.6 million, driven by robust growth in genomics and data services. Such fundamentals could attract long-term investors, even as short-term traders hedge for volatility.

The challenge for investors lies in balancing these competing signals. While bearish options activity may reflect near-term pessimism, TEM's strategic initiatives-such as expanding AI-powered clinical tools and introducing liquid biopsy assays-could drive long-term value according to investor reports. However, risks like rising competition and reimbursement delays remain pertinent as noted by Yahoo Finance.

Implications for the Upcoming Earnings Report

With the next earnings date projected between January 29 and February 23, 2026, the current bearish options activity suggests a high probability of a volatile post-earnings move. If the company fails to meet expectations, the $35.00 and $63.00 put strikes could act as liquidity magnets, potentially accelerating a downward trend. Conversely, a strong earnings report-particularly one that aligns with the company's revenue growth trajectory-could trigger a short-covering rally, especially if the stock trades above $63.57 (its current price) as detailed in Benzinga analysis.

Historical precedents, however, caution against overconfidence. The mixed performance around past earnings highlights the importance of monitoring broader market conditions and sector-specific catalysts. For instance, a broader biotech sector rally or positive regulatory news could override bearish options positioning.

Conclusion

Options trading sentiment provides a valuable, though imperfect, lens for assessing near-term risks and opportunities in Tempus AI's stock. The current bearish activity, particularly in put options, signals caution ahead of the next earnings report. Yet, historical data reveals that TEM's post-earnings performance is often decoupled from implied volatility, with outcomes influenced by a mix of fundamentals and external factors. Investors should treat options data as one input among many, balancing it with an evaluation of the company's strategic direction and macroeconomic context. As the January-February 2026 earnings window approaches, the interplay between these forces will likely determine whether TEM's stock becomes a battleground for bulls and bears-or a case study in market unpredictability.