Samuel O'Brient
4 min read
In This Article:
Tempus AI hits back at scathing short report originally appeared on TheStreet.
On May 28, Tempus AI (TEM) stock plunged as the market reacted to a damning report from short seller Spruce Point Capital. One day later, the company responded to the accusations against it.
A company at the intersection of healthcare and artificial intelligence (AI), Tempus began trading on the Nasdaq in June 2024, a year that didn’t see too many high-profile initial public offerings (IPOs). For that reason, Tempus stood out, and investors were hungry for new AI stocks to buy.
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While trading has been fairly volatile, TEM stock has mostly risen and is currently up 35% for the year. Since 2025 began, its performance has been quite strong, with year-to-date (YTD) gains of almost 60%.
The damning short report from Spruce Point Capital pushed shares down this week, although TEM stock has since recovered. Tempus took the opportunity to respond to short sellers' claims and offer its own take on the allegations.
Since its founding in 2009, Spruce Point Capital has released over 100 forensic short reports, laying out cases against companies across various industries. In April 2025, it revealed short positions in travel tech company Clear Secure and popular beverage producer Monster Energy.
Related: Billionaire fund manager, skeptical of AI, backs shocking stock
Most recently, though, it published a detailed short report that revealed a bet against Tempus stock. In it, the short-seller estimated that TEM stock posed a “50%-60% potential long-term downside and market underperformance risk” for investors, primarily due to concerns regarding its leadership and AI capabilities.
For context, Tempus uses AI to improve precision medicine solutions, as well as drug discovery and diagnostics. Its operating system is reported to analyze medical information and make it accessible for patients, as well as doctors and scientific researchers.
However, Spruce Point’s researchers make it clear in the report that they harbor grave concerns about the AI hype surrounding TEM stock, suggesting that it may be significantly overblown.
“Our concerns about the Company’s AI capabilities deepened after we evaluated split-second product demonstrations from promotional videos and screenshots from the Company’s website,” the report states. “Apparently, Tempus has not properly figured out how to leverage AI to cross reference and check even basic facts such as patient age and the sequencing order of samples and deliveries.”
