Tempus AI Skyrockets 5.26%—Is This the Dawn of a New Biotech Era?

Summary
• Tempus AI (TEM) surges 5.25% intraday to $69.83, trading near its 52-week high of $91.45.
• Q2 results show EBITDA breakeven and 82% annual revenue growth, with Genomics business up 115.3% YoY.
• Competitors like Exact Sciences and Guardant Health also raise 2025 guidance, signaling sector momentum.

Tempus AI’s explosive 5.25% intraday rally has ignited market speculation, driven by a Q2 earnings report that defied expectations. With a 42.6% YTD rally and a 52-week high just 23% away, the stock is trading at a pivotal inflection point. The biotech sector’s broader optimism, fueled by Exact Sciences’ $138M EBITDA and Guardant Health’s 31% revenue growth, adds context to TEM’s outperformance. Investors are now weighing whether this is a sustainable breakout or a short-lived surge.

Q2 EBITDA Breakeven and Guidance Hike Ignite Biotech Optimism
Tempus AI’s 5.25% intraday surge is directly tied to its Q2 earnings report, which revealed a critical milestone: adjusted EBITDA improved from -$16M to -$5.6M, with a projected $5M positive EBITDA in 2025. The company raised full-year revenue guidance to $1.26B (from $1.25B) and highlighted a 89.6% YoY revenue jump, driven by 115.3% growth in its Genomics business. Additionally, the launch of Tempus xM for immunotherapy monitoring and expanded AI-driven oncology pathways reinforced investor confidence. These developments, combined with sector-wide optimism from Exact Sciences and Guardant Health’s guidance upgrades, created a perfect storm for TEM’s rally.

Biotech Sector Mixed as Tempus AI Outpaces Peers
While Tempus AI surged, the broader biotech sector showed mixed signals. Exact Sciences (EXAS) and Guardant Health (GH) also raised 2025 guidance, with EXAS reporting $138M in adjusted EBITDA and GH achieving 31% revenue growth. However, TEM’s 42.6% YTD gain outperformed the sector’s 23.4% and S&P 500’s 18.3% returns. This divergence highlights TEM’s unique momentum, driven by its EBITDA breakeven and AI-driven product innovations, which position it as a standout in a sector grappling with regulatory headwinds and layoffs.

Leverage the Rally: ETF and Options Playbook for Tempus AI’s Breakout
• 200-day average: $54.78 (below current price); RSI: 52.62 (neutral); MACD: 0.70 (bullish divergence).
• Bollinger Bands: Price at $69.95 (above upper band of $66.27), indicating overbought conditions.
• Support/Resistance: Key support at $60.84–$61.07; resistance at $58.33–$59.48 (200D range).

Tempus AI’s technicals suggest a continuation of its bullish trend, with the 2X leveraged ETF TEMT offering amplified exposure. The stock is trading above its 200-day average and MACD histogram shows positive divergence, signaling potential for further gains. For options, TEM20250822C70 (call, $70 strike, 8/22 expiry) and TEM20250822C71 (call, $71 strike, 8/22 expiry) stand out. Both have high leverage ratios (21.01% and 21.87%) and moderate deltas (0.5077 and 0.4699), balancing directional exposure with time decay (theta of -0.3118 and -0.3158).

TEM20250822C70:
• IV: 76.02% (high liquidity)
• Turnover: 1.025M (strong volume)
• Gamma: 0.0456 (sensitive to price swings)
• Payoff at 5% upside: $4.47 (max(0, 73.44 - 70)).
• Why it works: High leverage and liquidity make it ideal for capitalizing on a continuation of the rally.

TEM20250822C71:
• IV: 82.68% (attractive volatility)
• Turnover: 132K (solid liquidity)
• Gamma: 0.0418 (moderate sensitivity)
• Payoff at 5% upside: $3.44 (max(0, 73.44 - 71)).
• Why it works: Slightly out-of-the-money but offers a balance of reward and risk, ideal for a measured bullish bet.

Action: Aggressive bulls should consider TEM20250822C70 into a break above $70.50, while conservative traders may use TEM20250822C71 as a hedge against a pullback.

Backtest Tempus AI Stock Performance
After a 5% intraday surge, Tempus AI (TEM) experienced a significant drop, with a -6.03% crash to $187.98. This indicates that the positive momentum did not persist, and the stock faced downward pressure in the immediate aftermath of the surge. The surge was not accompanied by major technical signals, suggesting that the move may not have been strongly supported by technical indicators, potentially leading to a loss of upward momentum. Therefore, TEM's performance after its surge cannot be reliably predicted by technical indicators alone, and further analysis of company fundamentals and market conditions is necessary.

Tempus AI’s Breakout: A Biotech Inflection Point?
Tempus AI’s 5.25% surge reflects a confluence of EBITDA breakeven, guidance upgrades, and sector-wide optimism. While the stock trades at a forward P/S of 7.32X (above industry average), its technicals and product momentum justify the premium. Investors should monitor the $70 support level and the sector leader ILMN (up 3.67%), as Illumina’s performance often signals broader biotech sentiment. For now, the rally appears sustainable, but volatility remains high—position sizing and stop-loss placement are critical. Watch for a $70.50 breakout to confirm the trend’s continuation.