Tempus AI heads into a difficult week with short sellers adding to positions, options traders turning sharply defensive, and a stream of insider sales pointing in the same direction as the bears.
Options positioning has moved well outside its normal range. The put/call ratio jumped to 0.48 on Tuesday — more than three standard deviations above its 20-day average of 0.38. That is the most defensive reading the ratio has shown in months, and it arrived on a day when the stock fell more than 4% to $49.36, capping an 11% weekly decline. The contrast with the prior two weeks is stark: the PCR had sat in a narrow band between 0.35 and 0.42 since late July before the spike. Something changed this week in how options traders are positioning.
Short interest adds to that pressure, though the borrow market itself is not particularly strained. Short interest climbed roughly 5% over the week to 19% of the free float — a meaningful level for any stock, and it follows a step-change higher around August 10 when shorts added roughly two million shares in a single session. Despite that, borrowing costs have actually eased, dropping to around 0.60% from 0.75% a week ago. Availability is running at 59% — tighter than its mid-July level near 90%, but well above the 12% floor touched earlier in the year. The lending market is tight but not stressed, which means short sellers have room to keep building without facing a financing squeeze. That is a less constructive setup for would-be bulls hoping a borrow squeeze drives a reversal.
The Street cut targets after the August 4 earnings print but largely held its ratings. Multiple firms trimmed — Piper Sandler to $56, Stifel to $50, HC Wainwright to $56, and BTIG to $70 — while maintaining their existing ratings. Needham stood apart, reiterating Buy with a $75 target. The mean target is now around $63, implying roughly 27% upside from current levels. The bull case rests on the $200M AstraZeneca data partnership, a path to positive cash flow, and what is a striking forward earnings revision — ranked in the top 13% of the universe on 12-month EPS growth expectations. The bear case is harder to dismiss: the EV/EBITDA sits at 86x, the price-to-book at 18x, debt from the Personalis acquisition remains a concern, and the ORTEX short score of 74.3 places TEM firmly among the names where short-side pressure is most concentrated. The EPS momentum factor scores are near the bottom of the distribution over both 30 and 90 days, signalling recent estimate cuts rather than upgrades.
Insider activity reinforces the cautious read. Over the past three weeks, the founder and Chairman/CEO Eric Lefkofsky sold roughly $3.7 million in stock across two transactions in late July. A division CEO, Ryan Fukushima, sold over $2 million across multiple transactions on and around the August 3 earnings date. A director added a small sale on August 14. Insider sales around earnings are not uncommon and many are pre-scheduled, but the volume and timing here — selling into what turned out to be a modest post-earnings bounce — is worth noting. The net 90-day insider position is technically positive in share terms due to option exercises, but the cash-sale flow has been one-directional.
The most recent earnings prints offer a different angle. The August 4 print produced only a 1.4% one-day gain, but the stock rallied 21% over the following five days. The Q2 result on July 30 showed a similar dynamic: a 5.6% one-day gain extending to 11% over five days. The next event is pencilled in for October 30 — more than two months away. Between now and then, the question is whether the post-earnings momentum that propped up the stock in late July and early August holds up against the renewed short-building and defensive options activity seen this week. Among close peers, QSI fell 11% on the week — matching TEM almost exactly — while DNA dropped 13%. The sector weakness is broad, but TEM carries meaningfully heavier short interest than most in the cohort.
What to watch: whether the put/call ratio normalises back toward its 0.38 average or holds elevated into next week, and whether short interest continues its step-higher trend from the August 10 inflection point.
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