Do You Believe in the Growth Potential of Tempus AI (TEM)?

Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The strategy generated a total return of 15.3% net of fees in the quarter compared to the strategy’s unmanaged benchmark, the S&P 500 Index’s 10.9% return. According to a three-factor performance attribution model, the selection effect contributed positively to the portfolio’s performance, which was partially offset by allocation and interaction effects. In addition, you can check the fund’s top 5 holdings to know its best picks in 2025.

In its second quarter 2025 investor letter, Patient Capital Opportunity Equity Strategy highlighted stocks such as Tempus AI, Inc. (NASDAQ:TEM). Tempus AI, Inc. (NASDAQ:TEM) is a healthcare technology company. The one-month return of Tempus AI, Inc. (NASDAQ:TEM) was -11.21%, and its shares gained 46.50% of their value over the last 52 weeks. On July 17, 2025, Tempus AI, Inc. (NASDAQ:TEM) stock closed at $60.65 per share, with a market capitalization of $10.382 billion.

Patient Capital Opportunity Equity Strategy stated the following regarding Tempus AI, Inc. (NASDAQ:TEM) in its second quarter 2025 investor letter:

“Tempus AI, Inc. (NASDAQ:TEM), is a leading precision medicine platform focused on transforming cancer care through data and artificial intelligence (AI). The business operates across three synergistic segments – genomics, data and services, and AI applications – that together reinforce its competitive moat. These segments feed into one another, enabling Tempus to build one of the world’s largest molecular databases of cancer patients. Leveraging this library, the company is embedding AI into diagnostic workflows to drive more personalized, data-driven treatment decisions. Though still early in its lifecycle, Tempus is on track to surpass $1B in revenue within its first decade and expects to achieve EBITDA profitability this year, an important milestone. While oncology remains its core market today, the company is expanding into other areas like cardiology, neuropsychology, and radiology. We believe healthcare is primed for disruption through AI and Tempus is well positioned to take advantage. We have high conviction in its ability to continue winning new business, expanding its database, and achieving profitability.”

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Tempus AI, Inc. (NASDAQ:TEM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held Tempus AI, Inc. (NASDAQ:TEM) at the end of the first quarter, compared to 17 in the previous quarter. In the first quarter of 2025, Tempus AI, Inc.’s (NASDAQ:TEM) revenue increased 75.4% year-over-year to $255.7 million. While we acknowledge the risk and potential of TEM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TEM and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Tempus AI, Inc. (NASDAQ:TEM) and shared the list of top 10 AI infrastructure stocks to buy. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.