Tempus AI Stock Gains New Bull as Baird Initiates Coverage with $59 Price Target

Tempus AI stock (NASDQ:TEM) is 1.98% higher in the pre-market, after Baird initiated coverage of the  company with an Outperform rating and a $59 price target, marking a fresh vote of confidence in the artificial intelligence-driven healthcare platform.

The initiation comes at a pivotal moment for the commercial-stage precision medicine firm, which has built what Baird describes as an attractive therapy selection franchise. The analyst highlighted Tempus's molecular information capabilities and AI-driven approach to personalized healthcare, suggesting the company's recent stock weakness has created an entry point for investors seeking exposure to the growing precision oncology sector.

Tempus has delivered a series of significant operational milestones that underpin the bullish thesis. In January 2026, the company announced its Total Contract Value had surpassed $1.1 billion as of December 31, 2025, reflecting data and analytics agreements with over 70 organizations. The client roster includes pharmaceutical heavyweights AstraZeneca, GlaxoSmithKline, and Pfizer, demonstrating widespread industry adoption of Tempus's multimodal data platform. This achievement signals robust future revenue visibility and validates the company's commercial strategy in a competitive landscape.

Strategic partnerships have further strengthened Tempus's market position. The company entered collaborations with NYU Langone Health and Northwestern Medicine in early January 2026, aimed at advancing precision oncology and expanding genomic testing access. These alliances enhance Tempus's molecular profiling and data science capabilities while extending its reach within leading healthcare institutions. Such partnerships not only generate revenue but also provide access to valuable clinical data that feeds the company's AI algorithms.

Regulatory progress has opened additional growth avenues. The FDA granted clearance in September 2025 for an upgraded version of Tempus Pixel, the company's AI-driven cardiac imaging platform. This approval enables commercialization beyond oncology, potentially diversifying revenue streams and reinforcing technological leadership in medical imaging applications.

The analyst community has grown increasingly optimistic about Tempus's prospects. Morgan Stanley raised its price target from $80 to $85 with an Overweight rating, while BTIG Research lifted its target from $96 to $105 with a Buy rating. Needham & Company made the most aggressive adjustment, increasing its target from $70 to $100. Baird's $59 price target sits at the conservative end of this range, suggesting room for upside if the company continues executing on its commercial strategy.

Institutional investors have also shown confidence. The Ark Innovation ETF and Ark Genomic Revolution ETF increased holdings in November 2025, adding 29,605 and 9,302 shares respectively. This institutional accumulation typically signals conviction in long-term growth potential and can provide price support during volatile periods.

The combination of Baird's fresh coverage, strong contract value growth, and strategic partnerships suggests markets are reassessing Tempus's valuation following recent weakness. With the stock trading below several analyst price targets and institutional investors adding positions, the near-term sentiment appears constructive, provided the company continues converting its $1.1 billion contract backlog into recognized revenue while managing the path to profitability.