Alphabet (NASDAQ:GOOG) and Tempus AI (NASDAQ:TEM) Critical Analysis

Tempus AI (NASDAQ:TEM) and Alphabet (NASDAQ:GOOG) are both large-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Earnings and Valuation

This table compares Tempus AI and Alphabet”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tempus AI	$803.32 million	14.08	-$289.81 million	($7.80)	-8.42
Alphabet	$359.71 billion	5.66	$100.12 billion	$8.97	18.71

Alphabet has higher revenue and earnings than Tempus AI. Tempus AI is trading at a lower price-to-earnings ratio than Alphabet, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for Tempus AI and Alphabet, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tempus AI	0	6	7	0	2.54
Alphabet	3	5	14	5	2.78

Tempus AI presently has a consensus price target of $63.42, indicating a potential downside of 3.44%. Alphabet has a consensus price target of $203.94, indicating a potential upside of 21.50%. Given Alphabet’s stronger consensus rating and higher possible upside, analysts clearly believe Alphabet is more favorable than Tempus AI.

Insider and Institutional Ownership

24.2% of Tempus AI shares are held by institutional investors. Comparatively, 27.3% of Alphabet shares are held by institutional investors. 27.6% of Tempus AI shares are held by insiders. Comparatively, 13.0% of Alphabet shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Tempus AI and Alphabet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tempus AI	N/A	N/A	-111.38%
Alphabet	28.60%	32.49%	23.52%

Summary

Alphabet beats Tempus AI on 12 of the 14 factors compared between the two stocks.

About Tempus AI

Tempus AI Inc. is a technology company advancing precision medicine through the practical application of artificial intelligence principally in healthcare. The company provides AI-enabled precision medicine solutions to physicians to deliver personalized patient care and in parallel facilitates discovery, development and delivery of optimal therapeutics. Tempus AI Inc. is based in CHICAGO.

About Alphabet

Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services, including ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play and YouTube; and devices, as well as in the provision of YouTube consumer subscription services. The Google Cloud segment offers infrastructure, cybersecurity, databases, analytics, AI, and other services; Google Workspace that include cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells healthcare-related and internet services. The company was incorporated in 1998 and is headquartered in Mountain View, California.