Butterfly Network shares fell 5.14% to $9.42 Wednesday after surging 22% Tuesday when Needham analyst David Saxon initiated coverage with a Buy rating and a $10 price target. Saxon’s sum-of-the-parts valuation was based on roughly 16 times the company’s 2027 sales estimate, with the bullish case centered on Butterfly’s proprietary ultrasound chip technology, Embedded licensing business and Garden developer program. Needham estimated partnerships with Midjourney and Mendaera could be worth about $300 million by 2030 and roughly $25 million over time, respectively, while three Garden applications launching later this year could add about 8 percentage points to 2027 growth. An upgraded handheld device is expected in early 2027. Risks include competition from GE Healthcare, Philips and Siemens Healthineers, the lack of commercial launches from Butterfly’s Embedded partners and continued reliance on its legacy business for roughly two-thirds of sales. Butterfly is also underperforming the Healthcare sector, which was up 0.45% Wednesday and has gained 9.61% over 90 days, despite falling 2.36% over the past month. Earlier results showed record second-quarter revenue of $32.6 million, a 71.4% gross margin and raised 2026 revenue guidance of $119 million-$123 million.