Shares of Tempus AI, Inc. (TEM) plummeted over 7% in pre-market trading on Friday, November 11th, after Stifel Nicolaus analyst Daniel Arias downgraded the stock to a "Hold" rating, 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 his rating from "Buy" to "Hold" 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.