Tempus AI Expands Imaging Portfolio with Lung Cancer Screening Partnership, But Core Risks Unaddressed

What happened

Tempus AI has partnered with Median to integrate the FDA-cleared eyonis lung cancer screening tool into its Pixel platform, aiming to enhance AI-driven diagnostics and expand its imaging portfolio. This move aligns with Tempus's strategy to grow Data & applications revenue, which saw ~31% growth in 2025, as part of its broader push to monetize multimodal data and AI tools. However, the latest DeepValue report highlights that Tempus faces significant headwinds, including class actions over contract accounting and Ambry billing practices, which could undermine financial stability and growth. The company's rapid revenue expansion, with 2025 preliminary figures up ~83%, is accompanied by persistent GAAP losses, a high valuation offering no margin of safety, and regulatory scrutiny that threatens payer reimbursement. While this partnership may boost top-line metrics, it does not mitigate the underlying legal and financial vulnerabilities that dominate the investment thesis.

Implication

The addition of lung cancer screening to Pixel may drive incremental Data & applications revenue, potentially aiding in achieving the 30%+ growth needed for a bullish scenario. However, if regulatory or legal issues escalate—such as payer pushback on billing or contract accounting challenges—the product expansion could have limited impact on profitability. Investors should closely monitor whether such initiatives translate into improved EBITDA margins, which remain thin and vulnerable to cost pressures. The partnership reinforces Tempus's focus on AI tools but does not alter the asymmetric risk-reward profile, where downside risks from litigation and integration overhangs outweigh near-term growth. Ultimately, with a valuation demanding flawless execution, this news is unlikely to shift the fundamental calculus favoring trimming or avoidance until risks are resolved.

Thesis delta

The partnership with Median supports Tempus's growth narrative by expanding its AI imaging portfolio, aligning with the base case of steady adoption in Data & applications. However, it does not materially change the key thesis risks—such as legal challenges, payer scrutiny, and financial instability—that keep the rating at 'POTENTIAL SELL' and emphasize the need for lower entry points or clearer resolution of overhangs before reconsidering the position.