New Price Target for AI Healthcare Stock as 'Incredible Run' Continues
The shares smashed our previous price target of $90 and have now gained 201% this year. Where is the stock headed next?
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
Tempus AI (TEM) roared to an 11% gain on Wednesday, as the cutting-edge healthcare stock reached a fresh all-time high. Shares of the Chicago-based company have now gained 201% this year.
The shares have gained 53% since TheStreet Pro readers were advised to buy TEM stock just four months ago. The stock has crushed our former target of $90. Back in June, we said $90 “could happen fast,” and the market cooperated.
Tempus AI appears poised for further gains, thanks to a bullish market environment in general and a fascination with AI-focused stocks in particular.
Here’s Our New Target for Tempus AI
The Tempus AI chart is projecting a rise to the $120 area.
Tempus AI didn’t just break out — it broke out with authority. Wednesday’s green breakout candle stands out like a giant exclamation point, towering above the previous price action. The breakout occurred on rising volume, as the stock saw its highest turnover in two weeks (down arrow).
Where is the stock headed next?
Tempus AI is forming an A-B-C-D pattern. This old school pattern, depicted on the chart below, suggests Tempus AI could reach $120 in the near future.
Some traders may be concerned about the stock’s RSI (relative strength index) indicator, which just moved into overbought territory (up arrow). Wednesday’s move pushed Tempus AI’s RSI to 76; any reading above 70 indicates an overbought asset.
These concerns are overdone. In a strong bull market, stocks and commodities often make their largest gains while their RSI readings are in overbought territory.
For example, spot gold became overbought on September 2nd (arrow), and has been overbought every day since then with just one exception (September 18). If you’d bought gold just as it became overbought, you’d be up by 14% in just over a month.
Is Tempus AI a Tempting Target?
Thanks to this stock’s incredible run, Tempus AI now has a market capitalization of about $18 billion.
While Tempus AI can no longer be considered a member of the small-cap or mid-cap universes, the company is still small enough to attract a potential suitor. Tempus AI could one day provide one of the mega-cap pharmaceutical giants with a quick onramp into AI healthcare, preferably at a healthy premium.
The Bottom Line
Tempus AI is a strong momentum stock, within the strong AI sector, within a strong market. We're staying long Tempus AI as what has historically been the market's strongest quarter gets underway.
At the time of publication, Ponsi was long TEM.
