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Tempus AI heads into its October 30 earnings report with a sharp single-day selloff, sticky short positioning, and a Street that only just began to form a view on the stock.
The most striking feature of this week is the price action. TEM fell 13.8% on Tuesday and is down 12.8% on the week, closing at $71.98, giving back much of the 11.4% gain accumulated over the prior month. The move is not isolated: the whole peer group was hit. 10x Genomics fell 17.5% on the day, Repligen dropped 7.7%, and AbCellera lost 4.6%. Even so, TEM's drawdown ranks among the steeper ones in the group, which matters given that the stock had recently been outperforming.
Short positioning looks entrenched but not accelerating. Short interest has barely budged this week, edging up 0.5% on the day to 15.7% of the free float, about 27.1 million shares. The week-on-week change is actually slightly negative, down 1.4%, and the month-on-month trend is lower too. The directional pressure from bears is not new: short interest peaked closer to 29 million shares in mid-September and has been gently unwinding since. Borrow cost at 0.43% is low and falling, down 5.5% on the week and nearly 14% over the month, reflecting no particular urgency to get short. Availability is ample, with roughly 2.5 shares available to borrow for every one already borrowed, and that ratio has been expanding steadily. The short score has drifted down to 64.3 from highs above 67 three weeks ago. None of this signals a squeeze setup, but it also means 15.7% of the float in bearish hands is a weight the stock has to carry into results.
Options traders are not pressing the bearish case. The put/call ratio at 0.40 is slightly below its 20-day average of 0.42 and well below the 52-week high of 0.66. There is no evidence of defensive hedging into earnings, which is notable for a stock that just dropped 14%.
The Street assembled remarkably quickly around TEM. Over the past six weeks, multiple firms initiated coverage from a standing start. Goldman Sachs came in with a Neutral and a $75 target on September 21. UBS also initiated Neutral at $70 on September 9. Roth Capital and Rothschild each set a Neutral at $67 on September 8. Cantor Fitzgerald took the other side with Overweight at $80 on September 2, and Piper Sandler upgraded to Overweight at $76 on September 1. Guggenheim was the most recent mover, raising its target from $65 to $92 on October 1 while keeping its Buy. The consensus mean target now sits at $70.61, just below the current price of $71.98 after the selloff. At these levels the stock has essentially traded through its average Street target in both directions over the course of a fortnight.
The bull case rests on the scalability of the AI diagnostics platform: the FDA-cleared ECG-PH product, the pending Personalis acquisition adding a measurable residual disease asset, and the Merck and Moderna INTerpath-001 readout validating neoantigen therapy as a category. Management has pointed to roughly $400 million of incremental 2028 revenue from the xT CDx approval and an expected $200 improvement in average selling price per test. Bears counter with a demanding valuation (EV/EBITDA at 102.9x, price-to-book at 23.2x), net debt of $3.00 per share against next-12-month sales of $9.87 per share, and early-stage commercial risk on Personalis's NeXT Personal product, which has only four MolDX coverage decisions and no disclosed commercial payer contracts. The EPS factor scores confirm the tension: forward earnings revisions rank in the 86th percentile, but near-term EPS momentum ranks in the 7th percentile. The Street expects a lot further out and is cutting estimates up close.
Insider activity warrants a note, though context matters here. CEO Eric Lefkofsky sold approximately $10.5 million of stock across multiple tranches on September 22, and the company's CEO of Diagnostics sold a further $874,000 on September 25. All transactions were conducted under pre-arranged 10b5-1 plans, which reduces their informational value as a sentiment signal. Lefkofsky remains the dominant holder at 22.5% of shares. ARK Investment Management added 415,000 shares in the latest reported period, bringing its stake to 5.6% of shares outstanding.
Wikipedia traffic, one of the alt data signals tracked for TEM, showed a z-score of 1.24 against its own 90-day history as of late September, suggesting retail attention is running somewhat above recent norms. None of the company's four tracked datasets, spanning registrations, drug trials, and medical devices, have been measured to lead its reported figures, so no forward read on the October 30 print can be drawn from them.
With results now 23 days away, the question for the next few weeks is whether the selloff re-attracts short interest that has been gradually unwinding, or whether the print resets the Street's rapidly assembled consensus.
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