Execution Memo No. 10 (Tempus update)

TechBio Carnage: Not the Time to Panic, Time to Capitalize

In this blog series, I document my trading. Right now, things aren’t looking great for my TechBio trade that I placed some months ago. Not at all. In this piece, I’ll cover how I’m shifting the TechBio portfolio to still ride the mega boom I believe will happen; the big question is when. Extra focus is on Tempus, as it remains the main piece in the TechBio play.

Context

The entire TechBio sector has come down hard. It started with the FDA halting NTLA’s trials, which sent a shockwave through gene-editing names. Recursion Pharmaceuticals added fuel to the fire when its CEO unexpectedly stepped down; not exactly music to my ears. Combine that with weak performance across much of the sector, and sentiment has collapsed. Tempus, Prime Medicine, and the rest of my TechBio basket have all taken hits. What was once a market priced for perfection is now one running on fear.

The good thing here is that my best investments usually come after aggressive drawdowns; they force me to really dig into the true metrics of success. That’s exactly what I’ve been doing over the past week with Tempus, which just released what were, on paper, “great” results. Yet the stock is down almost 30% from the peak; not ideal for my options on the name.

Tempus

Let’s jump right into Tempus. For those who haven’t read my Tempus AI Deep Dive, I believe the company has a real shot at becoming incredibly valuable in the long run. The problem is that the timeline to reach a dominant position in healthcare can be long; and the line between being a “tools company” and a true healthcare AI giant is thin. Either they remain just a tools company, which doesn’t make it a particularly interesting investment, or they evolve into a giant over time with a moat unlike anything we’ve seen before. Let me explain.

The CEO stated in Q3 earnings that he expects 25% growth ahead, not just for the next three years, but for the next ten. Funnily enough, that’s almost seen as bearish. The logic goes like this: it’s AI, so it should be growing faster; sell the stock.

But that misses the entire point. There’s what Tempus is today and what it could become in 20 years. Yes, they use AI today, but they’re not yet an “AI company” in the same way Palantir is. They can’t just expand instantly tomorrow. Why? Because they’re still laying the groundwork; and that takes time.

For Tempus to succeed, they need to dominate the entire health spectrum, not just oncology. Right now, oncology is their stronghold, and they’re executing well there. But if they remain confined to one branch, they won’t unlock the real power of multimodality.

Multimodal benefits are the key. You need scope and dominance across multiple medical verticals; radiology, pathology, cardiology, genomics, and beyond; because each domain feeds the others. You can’t achieve all that at once, so Tempus has to expand step by step, building critical mass in each field.

Once enough segments reach that tipping point, everything changes. The multimodal data flywheel kicks in; Tempus becomes the layer that sits between diagnostics and doctors. The system starts answering questions like “What’s the best course of action for this patient?” based on genomics, imaging, and clinical records combined. That’s how Tempus evolves from a diagnostics company into the intelligence layer of medicine itself.

Their full-stack product, Tempus One, is still in its infancy, currently piloted at Northwestern. But if it works; and early signs suggest it does; it could spread like wildfire. Once enough hospitals adopt it, switching costs will be massive. There will be little reason to use anything else.

To reach that point, however, Tempus must stay aggressive. They’ll need acquisitions; like Paige for pathology; and likely more, especially in proteomics and continuous data (wearables, metabolomics, behavioral signals). Those are still gaps in their multimodal ecosystem. Filling them turns the Tempus library from great to unbeatable.

If Tempus executes, the transformation will be gradual; then sudden. A slow grind as they integrate into hundreds of hospitals, followed by the moment the data moat becomes self-sustaining. That’s when they stop being “just a tools company” and start becoming the default operating system for healthcare.

Back to Reality

It’s easy to imagine a future where Tempus dominates; where their valuation could reach into the hundreds of billions. But that scenario is still far off. Before that, you have to look at risk and how to actually profit from the price action along the way.

The 25% “higher grind” growth path and already lofty valuation will come with volatility. The stock could easily drop 50% or more in the process. At the same time, competition is real. Tempus isn’t the only company in this race; just the best-positioned one for now. The future remains uncertain.

That’s why vigilance is key. You can’t just buy and forget. You have to monitor execution, adoption, and how fast the multimodal moat truly forms; because that’s what will separate a $20 billion company from a $500 billion one.

What I’m Doing

First, this is not financial advice. Second, TechBio carries massive risk.