Tempus AI Plummets 3.1% Amid FDA Momentum and Billionaire Bets: What’s Fueling the Volatility?

Summary
• Tempus AI (TEM) slumps 3.1% intraday to $96.19, breaking below its 52-week high of $104.32
• Billionaire Cliff Asness’s $54M stake now up 60% as FDA clearances and AI healthcare trends drive speculation
• Options frenzy: 2025-10-17 expiry sees 1093 contracts traded for the $100 call, signaling bullish bets
Tempus AI’s volatile session reflects a tug-of-war between regulatory optimism and profit-taking. The stock opened at $100.81 but cratered to $93.9, a 6.8% drop from its intraday high. With the healthcare AI sector in flux and a $650M convertible bond offering announced, investors are recalibrating positions ahead of key FDA and AI policy developments.

FDA Clearances and Billionaire Bets Ignite Short-Term Volatility
Tempus AI’s sharp intraday decline stems from a mix of profit-taking and sector rotation. The stock surged past $100 earlier this week on FDA clearance for its Tempus xR IVD device and a Trump executive order promoting AI in pediatric cancer. However, the rally triggered a wave of short-term selling as traders locked in gains. Billionaire Cliff Asness’s $54M stake, now up 60%, has amplified market attention, while the $650M convertible bond offering announced in June has introduced capital structure concerns. The 52-week high of $104.32 remains a critical psychological barrier, with the current price near the 200-day moving average of $60.89.

Healthcare Equipment Sector Sinks as Illumina Drags
The Healthcare Equipment and Supplies sector is under pressure, with Illumina (ILMN) down 3.55% on the session. Tempus AI’s 3.1% drop is less severe than ILMN’s decline, suggesting relative resilience in AI-driven diagnostics. However, the sector’s broader weakness—driven by regulatory scrutiny and capital outflows—casts a shadow over Tempus’s near-term momentum. Investors are pivoting to defensive plays as the sector leader’s struggles highlight valuation concerns.

Options and ETFs to Watch: Navigating the Volatility
• MACD: 5.16 (above signal line 3.76), RSI: 63.48 (neutral), Bollinger Bands: 100.63 (upper), 87.11 (middle), 73.59 (lower)
• 200D MA: $60.89 (below current price), 30D MA: $84.41 (below current price)
• Support/Resistance: 77.80–78.40 (30D), 57.54–58.97 (200D)
Tempus AI is trading near key technical levels, with the 200-day moving average acting as a potential floor. The RSI at 63.48 suggests neither overbought nor oversold conditions, while the MACD histogram’s positive 1.40 indicates lingering bullish momentum. Traders should monitor the $93.9 intraday low for a potential rebound or a breakdown below $90. The options chain reveals two standout contracts:
• TEM20251017P95 (Put): Strike $95, Expiry 2025-10-17, IV 83.81%, Leverage 24.45%, Delta -0.4198, Theta -0.0625, Gamma 0.0326, Turnover $71,679
• TEM20251017C95 (Call): Strike $95, Expiry 2025-10-17, IV 88.89%, Leverage 16.37%, Delta 0.5785, Theta -0.5694, Gamma 0.0308, Turnover $113,830
TEM20251017P95 offers high leverage (24.45%) and moderate delta (-0.4198), ideal for a bearish scenario where the stock drops 5% to $91.28. The put’s theta (-0.0625) and gamma (0.0326) suggest it retains value even with time decay. TEM20251017C95 is a balanced call with 16.37% leverage and a delta of 0.5785, suitable for a rebound above $95. Both contracts have high turnover, ensuring liquidity. Aggressive bulls may consider TEM20251017C95 into a bounce above $95, while bears should watch the $90 strike for a breakdown.

Backtest Tempus AI Stock Performance
Below is the interactive event-study module summarising how Tempus AI (TEM.O) tended to behave after any session that finished down 3 %-or-more from 2022-01-01 through 2025-10-10. Please scroll the panel to review detailed curves, win-rates and excess-return paths.Key take-aways (30-day event window):• 95 plunges detected; median one-day bounce is small (-0.5 %), but momentum turns positive after ~3 days. • By day 10 the average excess return vs. benchmark is roughly -1 ppt and not statistically strong; however, persistence improves afterwards, reaching +2.7 ppt by day 30. • Win-rate rises from ~47 % on day 1 to ~70 % by day 30, though none of the daily edges pass a 5 % significance threshold. Interpretation: sharp down-days have not been reliable tactical entry points for TEM; benefits accrue only if held several weeks, with meaningful dispersion across events. Consider combining with other filters (e.g., volume spikes, oversold RSI) to improve hit-rate.Feel free to ask for deeper slices (different look-back windows, alternate plunge thresholds, or risk-adjusted metrics).

Act Now: Key Levels and Sector Signals to Watch
Tempus AI’s near-term trajectory hinges on its ability to hold above $93.9 and retest the $95–$97 range. A breakdown below $90 would validate a bearish case, while a rebound above $97 could reignite AI healthcare enthusiasm. The sector leader Illumina’s -3.55% move underscores broader capital flight, so investors should monitor regulatory updates and the $100 call’s liquidity. If $90 breaks, TEM20251017P95 offers short-side potential. Aggressive bulls may consider TEM20251017C95 into a bounce above $95. Watch for $90 breakdown or regulatory reaction.