Tempus AI, Inc. TEM recently announced a collaboration with Genialis, the RNA-biomarker company. The multi-year agreement allows Genialis to leverage Tempus’ multimodal dataset to develop new RNA-based algorithms across cancer types.

The collaboration between Tempus and Genialis is likely to prove beneficial by combining the former’s expertise in clinical and molecular data with the latter’s AI-driven analytics. Together, they aim to develop advanced RNA-based biomarker algorithms, which can improve the accuracy of diagnostics and the effectiveness of personalized treatments in precision medicine.

(Read more: Tempus AI Stock Surges 23% in 6 Months: Should You Snap It Up Now?)

Likely Trend of TEM Stock Following the News

Following the announcement, shares of the company moved south 3.5% and closed at $37.49 yesterday. In the past year, TEM’s shares have lost 6.9% compared with the industry’s decline of 10.5%. The S&P 500 has gained 25.4% in the same time frame.

However, the collaboration between Tempus and Genialis enhances its offerings in precision medicine, particularly through AI-driven RNA biomarker development. This could attract more partnerships, improve its diagnostic and treatment platforms, and increase revenue potential. As these innovations gain traction in healthcare, Tempus' market position could strengthen, leading to long-term growth. Investors recognizing these advancements may drive higher stock value over time.

Meanwhile, TEM currently has a market capitalization of $6.12 billion. The Zacks Consensus Estimate for fiscal 2024 revenues is pegged at $698.5 million, indicating 117.8% growth from the reported figure of fiscal 2023.

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More on TEM’s Collaboration With Genialis

Clinical care for cancer patients is often limited by the lack of accurate biomarkers that predict how well a patient will respond to treatment. To solve this problem, Genialis has developed an AI-powered model, using data from around 1 million RNA-sequencing samples from diverse patients worldwide. This large molecular model, known as the Genialis TM Supermodel, generates precise and detailed biomarker algorithms that can help biopharma companies improve drug development.

As part of a collaboration with Tempus, Genialis is now using its analytics platform, Lens, to access de-identified patient data and validate these biomarkers. This partnership will help speed up the development of Genialis’ clinical algorithms, bringing them closer to being used in healthcare. In exchange, Tempus will have the opportunity to evaluate and potentially license these algorithms for use in its xR platform, expanding the company’s capabilities in clinical drug development.

Tempus' multimodal dataset has played a key role in the development of Genialis krasID, the first commercially available algorithm that identifies which cancer patients will benefit from KRAS inhibition. This algorithm, introduced at the 6th Annual Targeting-RAS Drug Development Summit in September 2024, predicts how patients will respond to KRAS-targeted treatments across different types of cancer and mutations. Genialis krasID has been independently validated using Tempus' real-world data and is able to categorize patients into high or low-likelihood groups for treatment response, with these groups already being tested in real-world studies.

Favorable Industry Prospects for TEM

Per a report by Grand View Research, the global AI in healthcare market size was estimated at $19.27 billion in 2023 and is expected to grow at a CAGR of 38.5% from 2024 to 2030.

The growing adoption of digital technologies in the healthcare sector owing to the growing need for reducing healthcare costs and offering enhanced quality patient-care services to patients are the prominent factors that are boosting the growth of global artificial intelligence in the healthcare market.

TEM’s Zacks Rank & Other Stocks to Consider

TEM carries a Zacks Rank #2 (Buy) at present.

Some other top-ranked stocks in the broader medical space are Masimo MASI, Accuray ARAY and Abbott Laboratories ABT.

Masimo, carrying a Zacks Rank #2 at present, has an estimated growth rate of 11.8% for 2025. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 31.7% against the industry’s 1% decline in the past six months.

Accuray, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1200% for 2025. Its earnings missed estimates in three of the trailing four quarters and met in one, delivering an average negative surprise of 141.97%.

ARAY’s shares have gained 8.8% against the industry’s 1% decline in the past six months.

Abbott, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 10% for 2025. It delivered a trailing four-quarter average earnings surprise of 1.64%.

ABT’s shares have risen 8.5% in the past six months compared with the industry’s 7.2% growth.

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