Piper Sandler upgraded Tempus AI from Neutral to Overweight on Tuesday and raised its price target to $76 from $56, sending TEM up about 2.1% to 2.5% in premarket trading.

Analyst David Westenberg said the upgrade reflects a change in his view of the stock. He had previously rated Tempus AI Neutral because he believed the company’s valuation was being driven more by AI sentiment than by the performance of its diagnostics and data businesses.

Westenberg said that assessment has changed as three growth drivers have become more visible, giving him greater confidence in Tempus AI’s fundamentals.

The first driver is the pending acquisition of Personalis. Through the deal, Tempus will gain ownership of a tumor-informed minimal residual disease, or MRD, platform that Piper Sandler views as a differentiated asset in oncology diagnostics.

The S-4 for the transaction was filed on August 31. It states that each Personalis share is valued at $16.25, to be paid in Tempus Class A stock at a ratio tied to the Tempus share price. Tempus also has the option to pay cash for up to half of the stock component.

The second driver is the positive readout from the INTerpath-001 study. Westenberg said the result increases the strategic value of both Personalis and Tempus AI as the tumor sequencing provider for what could become a new therapeutic class.

He added that the readout strengthens Tempus’s position in the MRD space while the Personalis deal is still pending, giving the company a clearer path in the clinical sequencing market.

The third driver is FDA approval of the tumor-only xT CDx test. Piper Sandler said the approval clears an important hurdle for Tempus to pursue unified ADLT pricing for its xT product line.

Westenberg also said xF, a related product, could follow a similar regulatory path in the second half of 2027. Piper Sandler said unified ADLT pricing would have a direct effect on Tempus’s revenue model for these tests.

The upgrade adds to recent Wall Street attention on Tempus as investors track how regulatory milestones and deal disclosures may affect its diagnostics and data businesses, which remain central to the company’s story as it expands beyond the broader AI-related narrative that has surrounded the stock.

Canaccord Genuity also commented after the August 31 S-4 filing, reiterating its Buy rating on TEM and maintaining a price target of $80.

That leaves Canaccord slightly above Piper Sandler’s new $76 target, with both firms now holding positive ratings on the stock.

The August 31 S-4 filing remains the most recent formal disclosure related to the Personalis transaction, and the deal terms are now publicly available for investors to review.