Tempus AI Plunges 1.2% Amid FDA Momentum and Volatile Options Activity – What’s Brewing?

Summary
• Tempus AI (TEM) trades at $91.94, down 1.23% intraday after opening at $93.65
• Intraday swing spans $89.22–$95.88, reflecting sharp volatility
• Options turnover surges to 5.98% of float, with 2025-10-17 contracts dominating
• Recent FDA clearances and AI-driven collaborations fail to sustain momentum as profit-taking and short-term options dynamics reshape sentiment. The stock’s 52-week high of $97.78 remains within reach, but near-term technicals and sector dynamics demand scrutiny.

FDA Momentum Fails to Sustain Rally as Profit-Taking and Options Expiry Weigh
Despite a string of FDA clearances for Tempus AI’s xR IVD device and cardiac imaging tools in the past 25 days, the stock has faltered as profit-taking intensifies. The recent 7.4% surge post-FDA approval has triggered short-term selling pressure, exacerbated by heavy options activity. The 2025-10-17 options chain shows 58,000+ contracts traded, with 85-strike puts and calls accounting for 30% of volume. This suggests aggressive hedging and speculative positioning ahead of expiry, compounding near-term volatility. Additionally, insider selling of $1.3M by executives and a 4.7% price drop post-analyst upgrade highlight fragile conviction among stakeholders.

Healthcare Equipment Sector Mixed as Tempus AI Trails Sector Leader Thermo Fisher
The broader Healthcare Equipment sector remains fragmented, with Thermo Fisher (TMO) down 0.68% and Medtronic (MDT) flat. Tempus AI’s 1.23% decline outpaces its peers, reflecting its speculative AI-driven growth narrative versus established players’ defensive positioning. While TMO’s stability underscores demand for traditional diagnostics, TEM’s volatility highlights market skepticism about its high P/E of -72.02 and reliance on regulatory milestones. The sector’s focus on AI integration—evident in Medtronic’s London AI hub expansion—contrasts with TEM’s short-term options-driven price action.

Options Playbook: High-Leverage Puts and Calls for Short-Term Volatility
• MACD: 3.41 (bullish divergence), Signal Line: 2.93, Histogram: 0.49 (momentum waning)
• RSI: 60.4 (neutral), Bollinger Bands: 94.26 (upper), 84.73 (middle), 75.20 (lower)
• 200D MA: 59.94 (far below price), 30D MA: 82.07 (key support)
• Support/Resistance: 77.99–78.39 (30D), 57.56–58.78 (200D)

Top Options Contracts:
• TEM20251017P85 (Put):
- Strike: $85, Expiry: 2025-10-17
- IV: 76.79% (elevated), Leverage: 47.23% (high), Delta: -0.249 (moderate), Theta: -0.082 (time decay), Gamma: 0.0258 (sensitivity)
- Payoff at 5% downside (ST = $87.34): $2.34 per contract. This put offers asymmetric upside if the stock breaks below $85, leveraging high implied volatility and liquidity (18,489 turnover).
• TEM20251017C85 (Call):
- Strike: $85, Expiry: 2025-10-17
- IV: 74.67% (moderate), Leverage: 10.18% (low), Delta: 0.756 (high), Theta: -0.400 (aggressive time decay), Gamma: 0.0263 (moderate)
- Payoff at 5% downside (ST = $87.34): $2.34 per contract. This call benefits from high delta and liquidity (162,390 turnover), ideal for a bounce above $85 amid sector rotation.

Action Insight: Aggressive bulls may consider TEM20251017C85 into a rebound above $85, while bears should monitor TEM20251017P85 for a breakdown below $85. Both contracts offer high leverage and liquidity, but the 85-strike put’s 47.23% leverage ratio makes it a compelling short-term play if the stock tests key support.

Backtest Tempus AI Stock Performance
Below is the interactive event-study report. You can review the cumulative return profile, win-rate curve and other diagnostics for the “-1 % intraday plunge” pattern in TEM.O since 2022.Key takeaways (30-day horizon):• 284 events identified; win-rate drifts from ~53 % (day 1) to ~62 % (day 30). • Average cumulative excess return over the benchmark ≈ +0.3 – 0.5 pp after day 10; not statistically significant at conventional levels.Feel free to explore the chart for more detail or let me know if you’d like to test different thresholds or holding windows.

Act Now: Position for Volatility as Tempus AI Nears Key Support
Tempus AI’s 1.23% decline reflects profit-taking after a 7.4% surge post-FDA clearance, but the stock remains within 5% of its 52-week high. Critical levels to watch include the 30D MA at $82.07 and the 200D MA at $59.94. The sector leader Thermo Fisher (TMO) down 0.68% signals cautious sentiment, but TEM’s high options turnover and leverage ratios suggest short-term volatility. Immediate action: Buy TEM20251017P85 for downside protection or TEM20251017C85 for a rebound above $85. Monitor TMO’s resilience for sector-wide cues.