Needham Buy Call Sends Butterfly Network Stock Up 22%

Overview

• Shares of Butterfly Network jumped about 22% to close near $9.93 after Needham initiated coverage with a Buy rating and a $10 price target.
• Needham pointed to Butterfly’s cMUT technology, a capacitive micromachined ultrasonic transducer that puts ultrasound on a semiconductor chip, as the core reason for its positive view because it lets third parties embed ultrasound into other devices.
• Recent partnership deals, including a multi-year agreement to supply Sam Altman–backed Merge Labs for brain-computer interface development, include upfront and milestone license payments, hardware commitments, and expected ongoing royalties.
• Butterfly reported stronger Q2 results with $32.6 million revenue, gross margin near 71%, a narrowed adjusted EBITDA loss, raised 2026 revenue guidance to $119–123 million, and about $124.7 million in cash at quarter end.
• Analysts and investors note key risks that could blunt upside: continued operating losses, competitive pressure from larger imaging companies, and uncertainty about whether Embedded products will scale commercially.