Investing in high quality synthetic intelligence (AI) shares and holding them in a Tax-Free Financial savings Account (TFSA) is a strong technique to generate tax-free returns over the subsequent decade. The worldwide AI market is projected to develop from US$244 billion in 2025 to over US$1 trillion by 2031, representing an annual development charge of practically 27%.
A quickly increasing addressable market presents a possibility for a number of firms to realize traction and develop their income and earnings over time. One such beaten-down tech inventory is Tempus you might have (NASDAQ:TEM).
The TFSA contribution restrict for 2025 has elevated to $7,000, bringing the utmost cumulative contribution room to $102,000. Let’s see why you would make investments $7,000 in TEM inventory proper now.
Is Tempus AI inventory a great purchase?
Valued at US$10.5 billion by market capTempus AI is a healthcare know-how firm offering next-generation sequencing diagnostics and molecular testing to healthcare suppliers and pharmaceutical firms. It gives information insights, scientific trial matching, algorithmic oncology exams, and analysis platforms.
Within the first quarter (Q1), Tempus AI reported income of US$256 million, representing a 75.4% year-over-year improve. The report quarter for the AI-powered healthcare firm was pushed by genomics income, which grew by 89% to US$194 million, and information providers income, which rose 43% to US$62 million. Administration raised full-year 2025 steerage to US$1.25 billion, indicating a year-over-year development of 80%.
Tempus AI introduced a US$200 million, three-year settlement with AstraZeneca and Pathos AI to construct the world’s largest basis mannequin in oncology. This deal brings Tempus’s complete remaining contract worth above US$1 billion for the primary time, offering visibility into income.
The partnership leverages over 300 petabytes of multimodal information linked to affected person outcomes, with the primary mannequin model anticipated inside 9 to 12 months. Importantly, the settlement is non-exclusive, enabling Tempus to pursue related partnerships with different pharmaceutical firms.
Tempus demonstrated spectacular operational effectivity with gross revenue rising 99.8% year-over-year to US$155.2 million. Its adjusted EBITDA (earnings earlier than curiosity, tax, depreciation, and amortization) loss improved by US$27.8 million to US$16.2 million, displaying clear progress towards profitability.
Tempus AI anticipates attaining a optimistic adjusted EBITDA in 2025. Each enterprise segments contributed to development: oncology testing volumes grew 20%, whereas hereditary testing (Ambry Genetics) surpassed expectations with 23% unit development, exceeding the unique mid- to high-teens expectations.
Tempus continues to construct its complete healthcare AI platform, with over 4,000 supplier connections and information from 40 million sufferers. The acquisition of Deep 6 enhances scientific trial matching capabilities, whereas Tempus advances its minimal residual illness (MRD) portfolio via each tumour-naive and tumour-informed assays.
With relationships spanning 19 of the highest 20 oncology pharmaceutical firms, Tempus is well-positioned to capitalize on the AI healthcare transformation.
Is TEM AI inventory undervalued?
Analysts count on Tempus AI to extend income from US$693.4 million in 2024 to US$2.61 billion in 2029. Comparatively, adjusted earnings per share are forecast to develop to US$1.69 in 2029, in comparison with a lack of US$1.58 in 2024.
If TEM AI inventory is priced at 60 occasions ahead earningsit is going to commerce round US$100 in early 2029, indicating an upside potential of virtually 70% from present ranges.
Tempus AI inventory gives a mixture of accelerating income development, bettering profitability metrics, and transformational partnerships, which place it as a frontrunner in AI-driven precision medication.
The AstraZeneca deal validates the corporate’s information technique whereas creating a possible blueprint for extra pharmaceutical partnerships. As healthcare more and more adopts AI options, Tempus’s complete platform and unmatched information property present vital aggressive benefits for sustained development.