The share price of precision medicine company Tempus AI (NASDAQ: TEM), a notable holding in former House Speaker Nancy Pelosi’s stock portfolio, plunged by double digits on Wednesday following a scathing short-seller report.
As of press time, TEM was trading at $53.86, down more than 18% on the day. Despite the sharp pullback, the stock remains up 61% year-to-date.
Why TEM stock is crashing
The sell-off was triggered by a report from activist short-seller Spruce Point Capital Management, which accused Tempus AI of inflating its financials, relying on questionable business practices, and leaning heavily on AI marketing without delivering meaningful results.
One of the report’s standout claims is that Tempus generated only $12.4 million in AI-related revenue in 2024, just 1.8% of its total $693.4 million revenue. This figure contrasts with the company’s high-tech branding.
The report also cast doubt on CEO Eric Lefkofsky, pointing to his history with companies facing bankruptcies and accounting issues.
It further alleged possible round-tripping of sales, vague partnerships, and aggressive billing practices, especially using code 81479, which lacks strict regulatory oversight.
Pelosi’s TEM stock bet
Despite the controversy, Pelosi’s January 14 investment in Tempus, estimated between $50,001 and $100,000 via call options, has still more than doubled, with gains exceeding 105% even after the recent dip. Her precise Congress trade timing had raised eyebrows earlier in the year as the stock surged.
Amid the 2025 rally, however, Spruce Point warned of a potential 50% to 60% downside, casting doubt on Tempus’s valuation and urging caution.
Before the short-seller report, Tempus AI had been riding a wave of financial success. In Q1 2025, the company reported $255.7 million in revenue, a 75.4% year-over-year increase. Gross profit climbed even higher, jumping 99.8% to $155.2 million, suggesting widening margins.
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The stock got another boost in late April after Tempus announced a $200 million partnership with AstraZeneca and Pathos AI. The long-term collaboration aims to develop a multimodal foundation model for oncology, leveraging Tempus’s vast trove of de-identified oncology data to drive clinical and biological insights.
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