Investing

Why Tempus AI is Blowing Up After Nancy Pelosi Reveals Position in the Stock

Rich Duprey

Published: January 21, 2025 1:18 pm

Shares of Tempus AI (NASDAQ:TEM) are soaring 36% higher in midday trading after it was revealed former House Speaker Nancy Pelosi had been recently buying the stock.

The California congresswoman has a reputation for possessing uncanny stock trading acumen, and her interest in Tempus created investor enthusiasm. According to the Unusual Whales site that tracks congressional stock activity, Pelosi generated returns last year of 70.9% compared to 24.9% for the S&P 500. Overall, Democrat portfolios were up 31% in 2024 while Republican portfolios were up 26%.

What happened?

Politicians are not supposed to trade on insider information gleaned from their oversight of the companies they regulate, but their portfolio performance tends to consistently shred the returns of the S&P 500. That they also adamantly oppose any limitations on their ability to trade stocks fuels the speculation of underhanded tactics.

Pelosi just released her stock trading disclosure form revealing she made nine separate transactions between the end of December and leading up to Inauguration Day, Jan. 20. While most of the transactions were related to stocks she already owned, such as Nvidia (NASDAQ:NVDA), Amazon (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOGL), she added two new positions to her portfolio.

Tempus AI was one of them. Pelosi purchased 50 call options with a strike price of $20 that also expire on Jan. 16, 2026. The value of the trade was between $50,000 and $100,000.

The other stock Pelosi bought was energy giant Vistra (NYSE:VST). She purchased 50 call options at a strike price of $50 with an expiration date of Jan. 16, 2026. The transaction was much larger than the Tempus AI trade, coming in between $500,000 and $1 million. VST stock was up over 6%.

What it means for the stock

The healthcare-focused AI stock only went public last June in an IPO that priced the stock at $37 per share. It has had some wild swings over the last seven months and hit $79 a share in November, but it was on a long slide lower since.

Tempus is building an AI-enabled diagnostics platform for doctors, drug companies, and patients and collecting real-time data on millions of patients. Its proprietary software then uses that data to train its large language models (LLM), a platform that it says is 50 times larger than The Cancer Genome Atlas (TCGA).

This is just a momentum move in TEM stock unrelated to its business, but Wall Street does have a $56 per share one-year price target on the stock, implying there is still 20% upside left in its shares.