Why Tempus AI stock has skyrocketed nearly 22% today

Niche Artificial Intelligence (AI) company. Tempus AI (TEMP 21.73%) is a recently listed stock making significant moves. On news that one of those was a strategic investment in a similar company, investors sent the company’s stock up nearly 22 percent on Wednesday. It was more than enough bounce to crush him S&P 500 0.4% increase in the index for the day.

Collecting multiple shares of a peer

Tempus AI disclosed in a regulatory filing after market hours on Tuesday that it completed a new acquisition of Personalized (PSNL 11.42%) shares under an investment agreement. The two companies had announced at the end of last week that they would carry out the transactions.

Just over 9.2 million Personalis shares were acquired by Tempus AI through the exercise of two sets of warrants. The warrants initially vested at the end of 2023 and entitled Tempus AI to purchase its company’s common stock for $1.50 or $2.50 per share. The exercise of the warrants resulted in a total price of just over $18.4 million to the buyer.

Separately, Tempus AI, obviously determined, purchased 3.5 million shares. For these, he paid $5.07 apiece, for a total of over $17.7 million.

A major owner

The two companies have notable synergy, as Tempus AI focuses on “smart diagnostics” in healthcare, while Personalis is a biotech company specializing in the development of cancer diagnostic tests. Announcing their initial strategic collaboration in 2023, Personalis said the goal is for the pair to commercialize the biotech’s NeXT Personal Dx diagnostic product.

According to both Tempus AI and Personalis, the former now owns just over 19% of the latter’s outstanding common stock.