Star investor Cathie Wood is betting on this AI stock

• Cathie Wood criticized after NVIDIA sale
• Focus on NVIDIA competitor AMD
• Increased bet on Tempus AI

Cathie Wood, the head of the investment company ARK Invest, has been accused in the past of missing the AI ​​hype. In particular, the fact that she had gradually removed the AI ​​superstar NVIDIA from the ARK portfolios, while the NVIDIA share continued its stock market rally and set new record levels on the stock market, earned her the displeasure of many investors and prompted Wood to withdraw her shares Defend investment strategy.

Wood is betting on other AI stocks

But Cathie Wood hasn’t renounced the AI ​​hype – instead she has reoriented herself. In November and December 2024, Wood increasingly bought into AMD, a direct competitor of NVIDIA. The chip company ended up on the shopping lists of several of their ETFs. Apparently the investor, who is known for her selection of disruptive stocks, is betting on further potential at AMD.

With Tempus, another AI share ends up in the ARK ETFs

In addition to AMD, Cathie Wood is apparently betting on another AI horse. The ARK boss bought Tempus AI shares several times towards the end of the year. Between December 6th and 12th alone, she purchased Tempus shares worth a total of around $30 million for her funds, and she continued to buy into the AI ​​company over the course of the month.

The company is represented both in the flagship fund ARK Innovation ETF, where Tempus accounts for 2.25 percent of the total investments, and in the ARK Genomic Revolution ETF, in which Wood holds 1,235,851 Tempus shares, accounting for 4.02 percent of the total -ETF value (as of January 9, 2024).

What makes the healthcare company an AI stock

Cathie Wood already had Tempus on her radar a few months ago. The much-noticed IPO in the summer brought Tempus more into the focus of investors, and shortly afterwards the investor stocked up on Tempus stocks worth billions for its funds.

But what makes the player in the healthcare industry an AI company? Tempus AI was founded in 2015 and uses artificial intelligence and machine learning in the healthcare sector. Specifically, Tempus uses AI to process medical data and claims to have one of the world’s largest libraries of clinical and molecular data and an operating system that makes this data accessible and usable. According to the company, Tempus AI allows doctors to “make data-driven decisions in near real-time to ensure personalized patient care.”

In the second quarter, the first official publication after the IPO, Tempus reported a 25 percent increase in sales to $166 million. The company’s bottom line, however, was a loss of $552 million, largely due to $493.1 million in stock compensation expenses and related employer payroll taxes related to the IPO. A quarter later, the impression became clear: Tempus once again recorded strong growth and improved revenues by around 33 percent to $180.9 million. However, the AI ​​company was still unable to demonstrate profitability; the loss amounted to $75.8 million.

Wood is betting on the future – in line with analysts

Tempus did not yet have any concrete forecasts for 2025 in its most recent balance sheet publication. The company said it wanted to end the full year with revenues of $700 million and adjusted EBITDA of around $105 million. “Given the unique nature of our business, it is difficult to predict these numbers with absolute accuracy. Therefore, the word ‘approximately’ implies a range,” management commented.

Apparently reason enough for Cathie Wood to step up her efforts on Tempus AI. The investor is not alone in her positive assessment of the AI ​​company; the majority of analysts are also bullish for Tempus. Seven analysts rate Tempus shares on TipRanks, four of whom give a “buy” rating and three others recommend holding the shares. The average price target is $59.56, which would give the stock an upside potential of around 59 percent.

In fact, the Tempus AI share on the NASDAQ still has some catching up to do: the current price level of around $39 is only slightly above the issue price of $37 at which the share was listed on the stock exchange. However, the share price was now significantly higher at $79.49.

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