Goldman Sachs Flags Renewal Risk for Tempus AI's Data Business
Tempus AI (TEM) recently received a neutral initiation from Goldman Sachs, which puts its fastest-growing businesses under different tests. The company's diagnostics segment shows visible near-term growth, but its data and applications segment faces renewal risk due to upcoming contract extensions.
In the second quarter of 2026, Tempus AI generated $382.5 million in revenue, up 22% year-over-year, with diagnostics revenue rising 20% to $289.3 million. Oncology volumes increased 31%, and MRD testing reached 9,000 tests, up 38% from the prior quarter.
Regulatory approvals could add another growth lever for Tempus AI. The FDA's approval of tumor-only xT CDx in the second quarter allows the company to move its solid-tumor DNA portfolio to ADLT pricing, potentially adding $85 million of annual revenue beginning in 2027.
Growth in the data and applications segment is a bigger question for Tempus AI. Revenue increased 28% in Q2, while Insights revenue jumped 36%. The company signed approximately $200 million in new Data and Applications licenses during the quarter.