Tempus AI (TEM) stock is rebounding strongly in Thursday's pre-market session, soaring 5.04% following a significant purchase by Cathie Wood's ARK Invest. This surge comes just a day after the stock tumbled 19% due to a scathing short seller report that raised concerns about the company's valuation and business practices.

ARK Invest, known for its focus on disruptive innovation, made substantial purchases of Tempus AI shares across two of its flagship ETFs. The ARK Genomic Revolution ETF (ARKG) acquired 34,299 shares, while the ARK Innovation ETF (ARKK) added a more significant 216,781 shares to its portfolio. This move by a prominent investment firm appears to have boosted investor confidence in Tempus AI, despite the ongoing scrutiny.

The recovery in Tempus AI's stock price demonstrates the market's volatile reaction to conflicting signals. On one hand, Spruce Point Capital Management's short seller report, titled "The Tempest Surrounding Tempus AI," raised red flags about the company's management and accounting practices. On the other hand, ARK Invest's substantial purchase suggests a continued belief in Tempus AI's potential within the AI sector. As the situation unfolds, investors will likely keep a close eye on further developments and any responses from Tempus AI regarding the short seller's allegations.