Tempus AI Surges 6.2% on FDA Breakthrough: Is This the Catalyst to Watch?

Summary
• Tempus AI (TEM) rockets 6.23% to $85.745, hitting a 52-week high of $85.775
• FDA clearance for Tempus xR IVD device sparks regulatory optimism
• Q2 2025 revenue jumps 90%, net loss narrows to $42.8M from $552.2M
• Options volume surges, with 1753 contracts traded for the $88 call expiring Oct 10

Tempus AI’s stock is in a frenzy as the FDA greenlights its RNA sequencing device, Tempus xR IVD. The 6.23% intraday surge reflects a mix of regulatory validation and operational momentum. With Q2 revenue soaring 90% and a 52-week high in sight, investors are scrambling to assess whether this is a sustainable breakout or a profit-taking trap.

FDA Clearance Ignites Optimism in RNA Sequencing
Tempus AI’s 6.23% surge is directly tied to the U.S. FDA’s 510(k) clearance for its Tempus xR IVD device, which uses RNA sequencing to identify molecular pathways in tumors. This regulatory win validates the company’s technology for biopharma clients, unlocking new revenue streams in oncology R&D. The clearance follows a string of recent approvals, including Pixel’s cardiac imaging updates and collaborations with Northwestern Medicine, which have positioned Tempus as a leader in AI-driven precision medicine. With RNA sequencing offering deeper insights than DNA alone, the market is betting on expanded partnerships and commercial adoption.

Biotech Sector Rally: Illumina Gains 5.28% as Precision Oncology Gains Momentum
The biotech sector is rallying on precision oncology optimism, with Illumina (ILMN) up 5.28% as investors rotate into genomic sequencing plays. Tempus AI’s FDA clearance aligns with broader industry trends, where RNA-based diagnostics are gaining traction. While Illumina focuses on DNA sequencing, Tempus’s RNA-centric approach offers complementary value, particularly in identifying dynamic gene expression patterns. The sector’s strength suggests that regulatory wins and data-driven partnerships are key drivers, with Tempus’s 6.23% move outpacing Illumina’s gains.

Options Playbook: Leverage Gamma and Theta for Short-Term Gains
• 200-day MA: $58.96 (well below current price)
• RSI: 53.88 (neutral, no overbought/oversold signal)
• MACD: 1.68 (bullish, but signal line at 3.02 suggests divergence)
• Bollinger Bands: Price at 85.745, near upper band at 90.67

Tempus AI’s price action suggests a breakout from a long-term bullish trend, with the 52-week high of $97.78 as the next target. The 200-day MA is a strong support at $58.96, while the 30-day support at $73.08 offers a secondary floor. With implied volatility at 74.10% for the $85 call (TEM20251010C85), the stock is primed for aggressive options plays.

Top Option 1: TEM20251010C85
• Code: TEM20251010C85
• Type: Call
• Strike: $85
• Expiry: 2025-10-10
• IV: 74.10% (high volatility)
• Leverage: 18.11% (strong)
• Delta: 0.5659 (moderate sensitivity)
• Theta: -0.3902 (rapid time decay)
• Gamma: 0.0373 (high sensitivity to price swings)
• Turnover: 156,109 (liquid)
• Payoff at 5% upside: $10.69 (max(0, 89.98 - 85))
This call offers a balance of leverage and liquidity, ideal for a 5% upside scenario. The high gamma ensures it gains value quickly if the stock breaks above $85.

Top Option 2: TEM20251010C88
• Code: TEM20251010C88
• Type: Call
• Strike: $88
• Expiry: 2025-10-10
• IV: 72.87% (moderate)
• Leverage: 26.06% (very strong)
• Delta: 0.4519 (moderate)
• Theta: -0.3534 (rapid decay)
• Gamma: 0.0382 (high)
• Turnover: 333,589 (extremely liquid)
• Payoff at 5% upside: $14.98 (max(0, 89.98 - 88))
This contract offers the highest leverage ratio (26.06%) and turnover, making it ideal for a short-term breakout. The 88 strike is just below the 52-week high, offering a high-risk, high-reward setup.

Actionable Insight: Aggressive bulls should target TEM20251010C88 into a break above $88. If the stock consolidates near $85, the C85 call provides a safer entry with strong gamma.

Backtest Tempus AI Stock Performance
The performance of the Transports ETF (TEMB) following a 6% intraday surge from 2022 to the present can be summarized as follows:1. Intraday Surge Impact: The 6% intraday surge in TEMB from 2022 to the present has significantly boosted the ETF's performance. However, it's important to note that this surge is a short-term fluctuation and may not reflect the long-term trend of the ETF.2. Long-Term Performance: To fully assess the performance of TEMB, it's necessary to consider the ETF's performance over a longer period. A 6% intraday surge is a substantial short-term gain, but it may not be indicative of sustained long-term growth.3. Market Context: The impact of the 6% surge should be evaluated in the context of broader market conditions. Other factors, such as overall market trends and economic indicators, can influence the performance of TEMB over the longer term.In conclusion, while the 6% intraday surge in TEMB from 2022 to the present has undoubtedly enhanced the ETF's short-term performance, a comprehensive assessment of its long-term performance would require consideration of additional factors and a longer evaluation period.

Tempus AI at Inflection Point: FDA Momentum or Profit-Taking Trap?
Tempus AI’s 6.23% surge on FDA clearance is a pivotal moment, but sustainability hinges on maintaining momentum above $85. The 52-week high of $97.78 and $88 strike price are critical resistance levels. With Illumina (ILMN) up 5.28%, the biotech sector is supportive, but investors must watch for profit-taking if the stock stalls. For now, the options market is pricing in a bullish bias, with the $88 call offering the highest leverage. Act now: Buy TEM20251010C88 if $88 breaks, or short-term traders can scalp the C85 call on a pullback to $83.