HOLY GRAIL OR HAIL MARY?

(TEM), (PFE), (AZN), (VSTM), (GOOGL), (MSFT), (AMZN)

Three years ago, I was in an oncologist’s waiting room watching one of my closest friends flip through another pastel-colored pamphlet on treatment options. We were waiting for test results that would determine his next six months. 

It felt like we’d time-traveled back to the 1990s: endless waiting, cryptic lab processes, and doctors making educated guesses with half the data. 

Fast forward to today, and I’m squinting at Tempus AI’s (TEM) latest earnings report thinking, “Well, that escalated quickly.”

Let’s be clear: we’re not debating whether AI has a role in cancer diagnostics. We’re already there. The real question is whether Tempus can survive long enough to lead that revolution — or whether it’s destined to become another brilliant flameout in the biotech bonfire.

Tempus AI is a classic case of Wall Street whiplash. 

On one hand, you’ve got a company with arguably the Holy Grail of oncology data — a sprawling archive of clinical and molecular cancer info that makes your average university lab look like a middle school science fair. 

On the other hand, they’re lugging around $800 million in debt and burning through cash.

First, the good stuff. Revenue grew 75% in Q1 to $255.7 million. Their genomics division? Up 89%, thank you very much. 

And their gross margins jumped from 53% to 61%, which tells me someone over there has figured out that scaling doesn’t have to mean setting money on fire. That kind of efficiency while growing is like spotting a unicorn in biotech — rare, slightly magical, and usually gone too soon.

But here’s what makes this fascinating from an investor’s point of view. Tempus isn’t trying to make a chatbot sound friendlier or optimize your TikTok feed. They’re building AI systems that can decode the genetic chaos inside tumors and suggest which treatment stands a fighting chance. 

We’re not talking about shaving minutes off your day. We’re talking about saving lives — or at the very least, extending them.

And Big Pharma’s noticing. Partnerships with Pfizer (PFE), AstraZeneca (AZN), Boehringer Ingelheim, and most recently Verastem Oncology (VSTM)? That’s not some Silicon Valley LinkedIn humblebrag. That’s cold, hard validation from companies that don’t write checks unless they smell ROI.

But back to that $800 million elephant in the room. A good chunk of that came from their Ambry Genetics acquisition, which added a shiny new set of capabilities — and a thumping interest expense of $18 million annually. Their liquidity? About $219 million. Not exactly a war chest.

This is where the narrative tightens. Tempus has the data, the vision, and the partnerships — but it also has the debt, the burn rate, and a biotech timeline where regulatory approval moves at the speed of a government form in triplicate.

And let’s not forget the competition. Google (GOOGL), Microsoft (MSFT), Amazon (AMZN) — all are elbowing their way into healthcare AI. The ghost of IBM Watson Health looms large, a cautionary tale of overpromising and underdelivering in this very space.

But Tempus may have one trick the tech titans don’t: data network effects. 

The more cancer data they ingest, the smarter their models get. The smarter the models, the more valuable the insights. The more valuable the insights, the more partners come calling. It’s a flywheel — one powered by terabytes of human suffering and hope.

Now here’s where things get emotionally expensive. Everyone wants to believe in a company curing cancer. Everyone wants AI to fix healthcare. But belief doesn’t cover interest payments. This is where investing with your heart collides with investing with your head.

Tempus says it’ll be adjusted EBITDA profitable by the end of 2025. And maybe it will. But biotech calendars are notorious liars — ask any seasoned investor who’s still waiting on a “Q2 milestone” from 2019.

Still, the upside is hard to ignore. The total addressable market for oncology diagnostics is enormous. Personalized medicine isn’t a trend — it’s the future. And replicating Tempus’s data library and its relationships with cancer centers isn’t something you can brute-force with capital alone. It takes time. It takes trust. It takes actual results.

So, what’s the move? If you’re going to play this game, think small — think surgical. A position sized for high volatility and asymmetric payoff. Don’t mortgage the house. Maybe don’t even tell your spouse. 

But for those with a stomach for risk and a taste for disruption, Tempus might just be the kind of moonshot that pays off.

Because here’s the reality: the best AI in the world won’t matter if the company behind it runs out of cash before it scales. Sometimes, it’s not about whether you can change the world. It’s whether you can survive long enough to try.