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Butterfly Network shares jump after Needham initiates coverage
Needham set a $10 price target and pointed to Butterfly’s cMUT technology, while earlier orders tied to Merge Labs’ ultrasound-on-chip effort support the upbeat view.
Butterfly Network Inc. shares rose 21.99% to close at $9.93 on Tuesday, after Needham & Company initiated coverage with a buy rating. In its initial research, Needham assigned a $10 price target, implying upside from the stock’s Monday close of $8.14.
Needham cited Butterfly’s differentiated capacitive micromachined ultrasonic transducer technology as the key driver behind its view that the company can enable a new wave of medical technologies across multiple categories. The firm also highlighted Butterfly’s embedded business model, saying it could allow the company to participate in new markets.
Additional investor sentiment was supported by earlier news that Merge Labs, backed by Sam Altman, chose Butterfly as its multi-year exclusive ultrasound-on-chip supplier for developing brain-computer interfaces. The arrangement includes upfront and milestone-based license payments, hardware purchase commitments, and technology access fees, with ongoing royalties expected on future commercial sales.
The article also notes that institutional interest increased, pointing to a 148% jump in committed capital in the second quarter, according to Insider Monkey data. It said the number of hedge funds holding Butterfly positions rose to 33 from 26 in the prior quarter, while combined holdings climbed to $425 million from $171 million quarter over quarter.