Aristotle Capital Management, LLC, an investment management company, released its “Core Equity Fund” first-quarter 2026 investor letter. A copy of the letter can be downloaded here. During the first quarter, the U.S. equity market declined, with the S&P 500 Index falling by 4.33%. The fixed-income sector also saw a downturn; the Bloomberg U.S. Aggregate Bond Index fell by 0.05%. In the quarter, the Fund (Class I-2) posted a total return of -4.45%, compared to the S&P 500 Index’s -4.33% return. The Fund’s underperformance in the quarter was driven by the allocation effect, while security selection contributed positively. In this environment, the Fund continues to focus on companies experiencing secular tailwinds or robust product-driven cycles. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Aristotle Core Equity Fund highlighted Tempus AI, Inc. (NASDAQ:TEM) as a new addition. Tempus AI, Inc. (NASDAQ:TEM) is a healthcare technology company that focuses on delivering precision medicine solutions through the use of AI and genomic data. On May 13, 2026, Tempus AI, Inc. (NASDAQ:TEM) closed at $45.90 per share. One-month return of Tempus AI, Inc. (NASDAQ:TEM) was -14.86%, and its shares lost 25.98% over the past 52 weeks. Tempus AI, Inc. (NASDAQ:TEM) has a market capitalization of $8.31 billion.
Aristotle Core Equity Fund stated the following regarding Tempus AI, Inc. (NASDAQ:TEM) in its Q1 2026 investor letter:
“Tempus AI, Inc. (NASDAQ:TEM) is a healthcare technology company specializing in AI-enabled precision medicine solutions. By leveraging AI and machine learning, Tempus connects laboratory test results with clinical data to improve patient care across multiple diseases. The company operates through three main business units: Genomics (Diagnostics), which offers advanced genetic testing and diagnostics; Data and Services, which commercializes de-identified healthcare data and supports clinical trials; and AI Applications, which develops algorithmic diagnostics and clinical decision support tools. Tempus collaborates with leading pharmaceutical and biotechnology firms, positioning itself as a key innovator in both oncology and broader healthcare markets.
In our opinion, Tempus stands out as a compelling investment opportunity due to its alignment with key secular trends such as AI, Data Analysis and Monetization, and Personalized Medicine. Since going public in mid-2024, Tempus has demonstrated impressive growth, driven by both organic expansion and strategic acquisitions like Ambry. The company’s robust portfolio in genomics and diagnostics—spanning oncology, hereditary risk assessment and advanced testing—along with its rapidly growing data and applications segment, positions Tempus at the forefront of personalized medicine. The company’s expanding database of over 45 million patient records enhances its value proposition to research partners, and ongoing innovations are expected to drive both revenue and average selling price growth, making Tempus well-situated to capitalize on the evolving healthcare landscape.”
Tempus AI, Inc. (NASDAQ:TEM) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 41 hedge fund portfolios held Tempus AI, Inc. (NASDAQ:TEM) at the end of the fourth quarter, up from 32 in the previous quarter. In Q1 2026, Tempus AI, Inc. (NASDAQ:TEM) reported revenue of $348.1 million, which grew about 36% year-over-year driven by its strong growth in diagnostic and data applications businesses. While we acknowledge the risk and potential of Tempus AI, Inc. (NASDAQ: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 Tempus AI, Inc. (NASDAQ: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 a bullish thesis on the company. In addition, please check out our hedge fund investor letters Q1 2026 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.
