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Tempus AI vs. Illumina: Which Oncology Stock Is Worth Buying Now?
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Key Takeaways
Tempus AI expands oncology reach via partnerships, new AI models and improved EBITDA outlook.
Illumina strengthens genomics leadership with NGS tools, partnerships and margin gains.
ILMN stands out with better valuation, earnings growth outlook and stronger stock performance.
Investors are increasingly turning their attention to the fast-growing Precision Oncology market, which Grand View Research projects will expand at a compound annual growth rate (CAGR) of 8% from 2025 to 2030. Two prominent companies with a strong foothold in this space are Tempus AI (TEM - Free Report) and Illumina (ILMN - Free Report) .
Tempus’s oncology division integrates genomic sequencing, liquid biopsy and AI-powered diagnostics to tailor treatment decisions in the present, while also developing core models and multimodal datasets that could influence the future of cancer care and drug discovery. Meanwhile, Illumina is advancing cancer genomics through its expanding next-generation sequencing (“NGS”) oncology portfolio.
With the market’s growth fueled by technological innovation and rising demand for diagnostic solutions that deliver meaningful clinical outcomes, which of these two stocks currently offers a more compelling investment case? Let’s take a closer look.
Over the past year, shares of Tempus have plunged 3.5% while those of Illumina have gained 57.3%. The broader medical sector has lost 25.1% and the S&P 500 Index has risen 31.6% during the period.
Image Source: Zacks Investment Research
The Case for Tempus
For Tempus, the expansion of partnerships with existing customers is essential for its growth. The company recently collaborated with Daiichi Sankyo, aimed at accelerating the clinical development and differentiation of an antibody drug conjugate program in oncology. In the same month, Tempus teamed up with Blood Cancer United to develop a comprehensive, patient-centered, real-world registry for pediatric acute myeloid leukemia. Tempus also partnered with NYU Langone Health, aimed at transforming cancer care through advanced molecular profiling and data-driven insights.
On the innovation side, the company introduced its new HRD-RNA algorithm. This next-generation model represents a significant improvement in identifying Homologous Recombination Deficiency (“HRD”), providing a more robust, functional assessment of tumor biology compared with traditional static DNA-based assays.
Tempus also unveiled the results from a new study demonstrating that its algorithmic test, Immune Profile Score, more accurately predicts outcomes for patients receiving immune checkpoint inhibitors than conventional biomarkers, including tumor mutational burden and microsatellite instability and PD-L1. Recently, the company expanded its AI-enabled care pathway intelligence platform, Tempus Next, into breast cancer to address critical care gaps in breast cancer care.
Operationally, TEM’s adjusted gross margin expanded 391 bps in the third quarter, despite a 64.7% rise in the cost of revenues. Meanwhile, Tempus experienced another quarter of sequential improvement in adjusted EBITDA, which went from a $1.5 million in the previous quarter to $12.9 million in the fourth quarter.
These factors have encouraged the company to expect strong 2026 growth. Full-year revenues are now expected to be approximately $1.59 billion, along with a positive adjusted EBITDA of $65 million in 2026.
The Case for Illumina
Over the years, Illumina has formed multiple pharma partnerships, including one with Labcorp (LH) to advance precision oncology through innovative applications of NGS solutions across the healthcare ecosystem. The company entered into a partnership with the Center for Data-Driven Discovery in Biomedicine to advance research in pediatric cancer and rare disease.
Genomics is increasingly moving upstream in healthcare, from diagnosing disease to helping prevent it. Illumina entered a strategic collaboration with Veritas Genetics Powered By Fuze Health to form a consortium that aims to bring preventive genomics into everyday healthcare through health insurance plans in the United States and under other global markets, setting a new standard for proactive health management.
Illumina’s leading cancer assay, TruSight Oncology 500, continues to gain traction, now enhanced with the streamlined TSO 500 v2 workflow. The company also launched DRAGEN v4.5, a major upgrade that expands pangenome representation and personalization to improve variant calling accuracy, especially in difficult genomic regions. It also launched TruPath Genome, setting a new standard for high-quality, comprehensive whole-genome insights for genetic disease. TruPath Genome offers a more complete genome, with the simplest sample-to-sequencer workflow.
Operationally, despite experiencing rising revenues, the company's non-GAAP gross margin was 65.5% for the fourth quarter, representing a 45-bps decrease quarter over quarter. Non-GAAP operating margin was 63.7%, which increased 64 bps year over year. Operating profit increased approximately 23.7% year over year, reflecting improved operating leverage resulting from an enhanced cost structure.
By focusing on operational excellence and product innovation, the company has provided its 2026 sales growth outlook. It now expects total revenues to rise 4-6% year over year on a reported basis. Non-GAAP diluted EPS is now projected to be in the range of $5.05-$5.20.
Valuation of TEM and ILMN
Tempus is trading at a forward 12-month price-to-sales (P/S) ratio of 5.22, below its one-year median of 7.79 over the past year. Illumina’s forward 12-month P/S ratio is 3.95, above its one-year median of 3.91.
Image Source: Zacks Investment Research
How Does the Zacks Consensus Estimate Compare for TEM & ILMN?
The Zacks Consensus Estimate for TEM’s 2026 sales implies year-over-year growth of 25.3%. For 2026, the loss per share is projected to be 40 cents compared with 61 cents a year ago.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ILMN’s 2026 sales implies a year-over-year rise of 4.4%. For 2026, EPS is projected to be $5.12 compared with the prior-year EPS of $4.84.
Image Source: Zacks Investment Research
TEM or ILMN: Which One to Pick?
Both Tempus and Illumina showcase strong fundamentals supported by innovation and partnerships. Tempus is scaling growth through collaborations, while advancing next-gen diagnostics like HRD-RNA algorithm, alongside steady operational gains and robust sales guidance. Illumina, on the other hand, continues to strengthen its oncology leadership with TruSight Oncology 500 advancements, expanded pharma partnerships and a solid genomic portfolio, backed by margin improvements and a refined sales outlook.
Analysts expect upbeat earnings growth for ILMN. Additionally, ILMN is more attractively valued than TEM, which makes the former a more favorable option for investors. Additionally, in terms of stock performance, Illumina has the edge.
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Tempus AI vs. Illumina: Which Oncology Stock Is Worth Buying Now?
Key Takeaways
Investors are increasingly turning their attention to the fast-growing Precision Oncology market, which Grand View Research projects will expand at a compound annual growth rate (CAGR) of 8% from 2025 to 2030. Two prominent companies with a strong foothold in this space are Tempus AI (TEM - Free Report) and Illumina (ILMN - Free Report) .
Tempus’s oncology division integrates genomic sequencing, liquid biopsy and AI-powered diagnostics to tailor treatment decisions in the present, while also developing core models and multimodal datasets that could influence the future of cancer care and drug discovery. Meanwhile, Illumina is advancing cancer genomics through its expanding next-generation sequencing (“NGS”) oncology portfolio.
With the market’s growth fueled by technological innovation and rising demand for diagnostic solutions that deliver meaningful clinical outcomes, which of these two stocks currently offers a more compelling investment case? Let’s take a closer look.
Over the past year, shares of Tempus have plunged 3.5% while those of Illumina have gained 57.3%. The broader medical sector has lost 25.1% and the S&P 500 Index has risen 31.6% during the period.
Image Source: Zacks Investment Research
The Case for Tempus
For Tempus, the expansion of partnerships with existing customers is essential for its growth. The company recently collaborated with Daiichi Sankyo, aimed at accelerating the clinical development and differentiation of an antibody drug conjugate program in oncology. In the same month, Tempus teamed up with Blood Cancer United to develop a comprehensive, patient-centered, real-world registry for pediatric acute myeloid leukemia. Tempus also partnered with NYU Langone Health, aimed at transforming cancer care through advanced molecular profiling and data-driven insights.
On the innovation side, the company introduced its new HRD-RNA algorithm. This next-generation model represents a significant improvement in identifying Homologous Recombination Deficiency (“HRD”), providing a more robust, functional assessment of tumor biology compared with traditional static DNA-based assays.
Tempus also unveiled the results from a new study demonstrating that its algorithmic test, Immune Profile Score, more accurately predicts outcomes for patients receiving immune checkpoint inhibitors than conventional biomarkers, including tumor mutational burden and microsatellite instability and PD-L1. Recently, the company expanded its AI-enabled care pathway intelligence platform, Tempus Next, into breast cancer to address critical care gaps in breast cancer care.
Operationally, TEM’s adjusted gross margin expanded 391 bps in the third quarter, despite a 64.7% rise in the cost of revenues. Meanwhile, Tempus experienced another quarter of sequential improvement in adjusted EBITDA, which went from a $1.5 million in the previous quarter to $12.9 million in the fourth quarter.
These factors have encouraged the company to expect strong 2026 growth. Full-year revenues are now expected to be approximately $1.59 billion, along with a positive adjusted EBITDA of $65 million in 2026.
The Case for Illumina
Over the years, Illumina has formed multiple pharma partnerships, including one with Labcorp (LH) to advance precision oncology through innovative applications of NGS solutions across the healthcare ecosystem. The company entered into a partnership with the Center for Data-Driven Discovery in Biomedicine to advance research in pediatric cancer and rare disease.
Genomics is increasingly moving upstream in healthcare, from diagnosing disease to helping prevent it. Illumina entered a strategic collaboration with Veritas Genetics Powered By Fuze Health to form a consortium that aims to bring preventive genomics into everyday healthcare through health insurance plans in the United States and under other global markets, setting a new standard for proactive health management.
Illumina’s leading cancer assay, TruSight Oncology 500, continues to gain traction, now enhanced with the streamlined TSO 500 v2 workflow. The company also launched DRAGEN v4.5, a major upgrade that expands pangenome representation and personalization to improve variant calling accuracy, especially in difficult genomic regions. It also launched TruPath Genome, setting a new standard for high-quality, comprehensive whole-genome insights for genetic disease. TruPath Genome offers a more complete genome, with the simplest sample-to-sequencer workflow.
Operationally, despite experiencing rising revenues, the company's non-GAAP gross margin was 65.5% for the fourth quarter, representing a 45-bps decrease quarter over quarter. Non-GAAP operating margin was 63.7%, which increased 64 bps year over year. Operating profit increased approximately 23.7% year over year, reflecting improved operating leverage resulting from an enhanced cost structure.
By focusing on operational excellence and product innovation, the company has provided its 2026 sales growth outlook. It now expects total revenues to rise 4-6% year over year on a reported basis. Non-GAAP diluted EPS is now projected to be in the range of $5.05-$5.20.
Valuation of TEM and ILMN
Tempus is trading at a forward 12-month price-to-sales (P/S) ratio of 5.22, below its one-year median of 7.79 over the past year. Illumina’s forward 12-month P/S ratio is 3.95, above its one-year median of 3.91.
Image Source: Zacks Investment Research
How Does the Zacks Consensus Estimate Compare for TEM & ILMN?
The Zacks Consensus Estimate for TEM’s 2026 sales implies year-over-year growth of 25.3%. For 2026, the loss per share is projected to be 40 cents compared with 61 cents a year ago.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ILMN’s 2026 sales implies a year-over-year rise of 4.4%. For 2026, EPS is projected to be $5.12 compared with the prior-year EPS of $4.84.
Image Source: Zacks Investment Research
TEM or ILMN: Which One to Pick?
Both Tempus and Illumina showcase strong fundamentals supported by innovation and partnerships. Tempus is scaling growth through collaborations, while advancing next-gen diagnostics like HRD-RNA algorithm, alongside steady operational gains and robust sales guidance. Illumina, on the other hand, continues to strengthen its oncology leadership with TruSight Oncology 500 advancements, expanded pharma partnerships and a solid genomic portfolio, backed by margin improvements and a refined sales outlook.
Analysts expect upbeat earnings growth for ILMN. Additionally, ILMN is more attractively valued than TEM, which makes the former a more favorable option for investors. Additionally, in terms of stock performance, Illumina has the edge.
TEM and ILMN carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.