Shares of Tempus AI (NASDAQ: TEM) fell 4% following a critical short-seller report by Spruce Point, which questioned the company's product integrity, leadership credibility, and accounting practices.

Key Allegations from Spruce Point

• Minimal AI Revenue: In 2024, Tempus AI's “AI Applications” line generated just $12.4 million—under 2% of $693.4 million total revenue—exposing a gap between branding and financials.

• Leadership Concerns: CEO Eric Lefkofsky's track record includes past companies with bankruptcies and restatements, raising governance questions.

• Aggressive Billing: The report flags heavy use of Medicare billing code 81479, a catch-all code prone to abuse, suggesting revenue inflation at the expense of clinical necessity.

According to historical revenue mix data, AI services have consistently accounted for only a tiny fraction of Tempus's income—a trend you can verify in detail via the Revenue Product Segmentation API.

Financial and Market Impact

Spruce Point projects a 50%-60% downside for TEM's share price, while the current sell-side consensus target of $66.82 implies barely 1% upside. To see how analyst price targets have shifted in response to these allegations, consult the Price Target Summary API, which collates real-time updates on consensus estimates.

What Investors Should Watch

1. Product Revenue Trends: Will AI-related sales accelerate meaningfully, or remain a rounding error?

2. Governance Responses: How will Tempus's board address leadership and related-party transaction concerns?

3. Regulatory Scrutiny: Could billing-practice allegations spark audits or reimbursement clawbacks?