Shares of Tempus AI, Inc. (TEM) plummeted by 8.72% on Friday, November 11th, 2024, following an analyst downgrade by Stifel Nicolaus. The sharp decline in the stock price was primarily driven by Stifel analyst Daniel Arias lowering his rating on Tempus AI from "Buy" to "Hold," citing valuation concerns and growth uncertainties.

In his research note, Arias highlighted that while Tempus AI's AI-driven precision medicine platform has shown promising growth, the company's lofty valuation no longer appears justified given the potential challenges it may face in scaling its operations and maintaining its rapid expansion trajectory. The analyst's decision to lower the rating appears to have triggered a wave of selling pressure, as investors reassessed the company's prospects and growth outlook in light of the emerging concerns raised by Stifel Nicolaus.

Despite the stock decline, Tempus AI also announced the publication of a study in JAMA Network Open, highlighting the benefits of concurrent RNA and DNA sequencing in advanced cancer care. However, this positive news did not seem to offset the market's reaction to the analyst downgrade, which was the primary driver behind the stock's significant plummet on November 11th.