Tempus AI Plummets 5.74% as $770M Volume Ranks 84th in Market

On August 25, 2025, Tempus AI (TEM) closed with a 5.74% decline, marking its largest single-day drop in recent weeks. The stock traded at a volume of $770 million, representing a 49.08% drop from the previous day’s activity and ranking 84th in market-wide trading volume. The sharp selloff occurred amid mixed signals in the broader market, with investors recalibrating positions ahead of key macroeconomic data releases later in the week.

Analysts noted that the move reflected broader caution in AI-focused equities following a recent surge in speculative trading. While no direct corporate announcements impacted Tempus’ shares, sector-wide profit-taking and reduced liquidity in extended-hours trading contributed to the volatility. The decline also highlighted growing sensitivity to valuation metrics among growth stocks, as market participants reassessed earnings multiples in a shifting rate environment.

Backtesting of a high-volume trading strategy revealed mixed performance characteristics. A model selecting the top 500 stocks by daily trading volume and holding for one day generated a 0.98% average return over 365 days, with total gains of 31.52%. The strategy achieved a Sharpe ratio of 0.79, demonstrating reasonable risk-adjusted returns despite facing daily swings ranging from -4.47% to +4.95%. These results underscore the challenges of capitalizing on short-term momentum in highly liquid but volatile markets.