Why Tempus AI Stock Soared 15% Today

Shares of Tempus AI (NASDAQ: TEM) soared on Monday. The company's stock jumped 15% as of market close. The spike comes as the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) jumped 0.4% and 0.6%, respectively.

Tempus, a "precision medicine" company that leverages artificial intelligence (AI) to better treat patients, was the target of a short report last week alleging, among other things, that Tempus is overstating its use of AI. On Friday and Saturday, the company made announcements regarding two AI-driven programs. Whether the timing was deliberate or not, the announcements appeared to help quell doubts introduced by the short seller allegations.

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Tempus puts AI in the spotlight

Tempus One, the company's AI platform that is intended to help physicians make better decisions, got a key update. The company announced Saturday that the platform will now have direct access to electronic health records (EHR) systems. As the company describes it, the expanded access to data allows the platform to "capture real-time clinical, molecular and imaging data from millions of patients and makes that data easily digestible and useful for clinicians and care teams."

Image source: Getty Images.

On Friday, the company announced an initiative it calls Fuses. The company says it will use its vast amount of clinical data to create "an AI-enabled diagnostic platform offering physicians the largest suite of algorithmic tests designed to make precision medicine a reality."

Tempus keeps a buy rating

Today, investors were also pleased to see that TD Cowen is maintaining its buy rating, unconvinced by the short seller's allegations. Despite this, and the company's recent announcements, I believe that Tempus' stock is currently overvalued even if the short seller's allegations don't hold up.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.