We recently published a list of 11 Best Performing Healthcare Stocks to Buy Now. In this article, we are going to take a look at where Tempus AI, Inc. (NASDAQ:TEM) stands against other best performing healthcare stocks to buy now.
Trump’s Healthcare Executive Order Brings a Win
On April 15, CNBC reported that President Trump’s healthcare-focused executive order brought in a win for the sector. Trump directed his health department to collaborate with Congress to revamp a law allowing Medicare to negotiate prescription drug prices. The announcement seeks to bring a change that the pharmaceutical company has lobbied for. Since the negotiation process is included in legislation, Trump’s executive order cannot implement the change itself. However, it directs Secretary of Health and Human Services Robert F. Kennedy Jr. to join hands with Congress and change it.
CNBC reported that drug makers have been working to delay the eligibility timeline for small-molecule drugs to be available for price negotiations by four years. This typically includes pills and most medications. This goes hand in hand with the 13-year wait until more complex biotech drugs are eligible for Medicare price negotiations.
Trump’s wide-ranging executive order also focuses on slashing healthcare costs. It comes a day after the administration instituted a national security report on the pharma industry. CNBC called the report “a precursor to sector-specific tariffs.”
Medicare’s negotiating powers have been a subject of contention, as drug makers have opined that they would suppress innovation and have rallied against the time frame for negotiation eligibility for most drugs. The law now allows the government to negotiate prices for drugs with no competition, which includes complex biotech or biologic medications after 13 years on the market, but 9 years for their administration as capsules and pills.
Although they did not provide specifics, White House officials told reporters that other changes to the negotiation process would yield more savings than those attained during the first round under the Biden administration. While the Biden administration negotiated price cuts as steep as 79% for the first ten most expensive drugs to the Medicare program, the Trump administration would negotiate prices for the following 15 medications. This includes Pfizer’s cancer drugs Ibrance and Xtandi, as well as Novo Nordisk’s blockbuster diabetes and weight-loss treatments Ozempic and Wegovy.
Our Methodology
We used Finviz to screen healthcare stocks and selected the best performers based on their year-to-date (YTD) performance, as of May 9, 2025. We also included the number of hedge fund holders for each stock as of Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of year-to-date performance.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Tempus AI, Inc. (TEM): Among Most Popular Stocks on Robinhood in 2025
A technician in a lab coat standing in a cleanroom with energy storage systems in the background.
Tempus AI Inc. (NASDAQ:TEM) is a healthcare technology company that brings AI and machine learning to healthcare. The company provides next-generation diagnostics across various disease areas by employing technology capabilities. It leverages analytics and data to personalize medicine and has a product line spanning data, genomics, and AI applications. Tempus AI, Inc. (NASDAQ:TEM) focuses on building platforms for cardiology, oncology, infectious diseases, neuropsychiatry, and radiology.
On May 7, analyst Daniel Brennan of TD Cowen maintained a Buy rating on Tempus AI, Inc. (NASDAQ:TEM), retaining the price target of $62.00. The analyst based the rating on the company’s strong fiscal Q1 performance, as it reported better-than-expected gross margins and EBITDA along with a 3% sales beat.
The core Genomics segment and the recently acquired Ambry business are the primary contributors to this performance. The overall financial outlook for Tempus AI, Inc. (NASDAQ:TEM) remains positive despite a higher-than-expected cash burn due to one-off factors that are expected to simmer down in the following quarter.
Management raised the full-year 2025 revenue guidance to $1.25 billion, reflecting around 80% year-over-year growth. This notable improvement in guidance highlights robust performance in the genomics and data businesses and the contribution from the AstraZeneca-Pathos deal.
Overall, TEM ranks 1st on our list of the best performing healthcare stocks to buy now. While we acknowledge the potential for TEM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TEM but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
