Key Takeaways
- Shares of Butterfly Network surged approximately 31% following Midjourney’s announcement of its healthcare arm, Midjourney Medical, featuring the Midjourney Scanner
- Each prototype of the full-body ultrasonic scanner incorporates 40 Ultrasound-on-Chip modules from Butterfly, through a co-development partnership valued at up to $74 million spanning five years
- TD Cowen’s Joshua Jennings highlighted that this partnership validates Butterfly’s chip-licensing business model as a distinct revenue generator
- With Midjourney targeting 5,000 scanner spa facilities and over 50,000 global units installed by 2031, Butterfly could see substantial chip demand growth
- William Blair raised concerns regarding FDA clearance timelines, insurance coverage, and the clinical value proposition of routine full-body scanning
Shares of Butterfly Network (BFLY) climbed to $7.54 on Thursday, marking a roughly 31% increase, following Midjourney’s public revelation of its healthcare division and a groundbreaking device leveraging Butterfly’s proprietary technology.
Midjourney Medical introduced the Midjourney Scanner — a full-body ultrasonic computational tomography system. Each existing prototype integrates 40 of Butterfly’s proprietary Ultrasound-on-Chip imaging modules, with future iterations expected to incorporate even more.
The revelation propelled BFLY to a fresh 52-week peak of $8.01 intraday, climbing from the previous day’s closing price of $5.71.
This partnership operates through Butterfly Embedded, previously called Octiv — the company’s chip-licensing and co-development division. Butterfly revealed the arrangement in an SEC filing dated November 2025, noting anticipated payments reaching up to $74 million across five years.
Elon Musk responded to the news on X with a brief “cool,” which sustained social media buzz around the development throughout trading hours.
Short interest stood at approximately 12.6% of the float prior to Thursday’s session. The unwinding of bearish positions provided additional momentum to the rally.
Analyst Perspectives on the Partnership
TD Cowen analyst Joshua Jennings quickly emphasized the strategic significance. He maintained that this partnership demonstrates Butterfly’s chip platform possesses substantial value independent of its handheld ultrasound product line — creating opportunities for licensing income, future chip sales, and revenue-sharing arrangements.
William Blair also provided commentary, characterizing Midjourney’s deployment strategy as a potentially significant long-term catalyst for Butterfly.
Midjourney has set its sights on establishing 5,000 specialized “Midjourney Spas,” with each location operating approximately 10 scanners. The inaugural facility is slated to launch in San Francisco during late 2027.
The organization is simultaneously developing next-generation scanner models scheduled for 2028, aiming for more than 50,000 installed units worldwide by 2031. With roughly 40 chips required per scanner, William Blair indicated this projection represents a meaningful growth opportunity for Butterfly’s semiconductor business.
Unanswered Questions Persist
Not all observers are entirely convinced. William Blair’s Andrew Brackmann identified several unresolved issues that could influence the partnership’s trajectory.
He raised doubts about Midjourney’s ability to secure FDA authorization quickly enough to accommodate such aggressive demand projections. Insurance reimbursement represents another significant obstacle — Brackmann views it as essential to validating the market potential.
He further observed that no preliminary clinical data from the scanner has yet demonstrated meaningful utility for routine whole-body screening applications.
Butterfly executives including CEO Joe DeVivo, CFO John Doherty, and SVP of Innovation David Horsley were slated to participate in a TD Cowen Medical Devices Emerging Growth Call at noon ET Thursday.
Broader market conditions also provided support, with the S&P 500 advancing 0.9% and the Nasdaq climbing 1.2% during the trading session.
BFLY was changing hands at $7.49, up 31.1%, at publication time.
