Butterfly Network (BFLY) shares closed the holiday-shortened week at $8.90, marking a 55.9% surge from the prior week's close of $5.54. The rally came on the heels of Midjourney's announcement of a full-body scanner prototype that integrates 40 of Butterfly's Ultrasound-on-Chip imaging modules. Trading volume was exceptionally heavy at nearly 59 million shares, far above typical daily activity.
The jump underscores renewed investor focus on Butterfly's licensing strategy, which positions the company as a technology supplier rather than just a point-of-care ultrasound device maker. Midjourney's scanner, still a prototype, relies on Butterfly's semiconductor-based imaging chips, and the company noted that future versions are expected to incorporate "substantially more" modules. If commercialized, a higher chip count could significantly shift Butterfly's revenue mix away from probe sales toward licensing and component income.
The five-year licensing deal, first disclosed in a November 2025 SEC filing, includes a $15 million upfront payment, $10 million in annual license fees paid quarterly, and up to $9 million in milestone payments. Additionally, the agreement provides for revenue sharing and chip purchase payments if Midjourney moves the scanner into commercial production.
Butterfly CEO Joseph DeVivo described the development as a "potentially meaningful commercial opportunity" and expressed pride in supporting Midjourney's mission to "democratize access to personal imaging data." Midjourney's public roadmap targets full-body scans of 60 seconds or less and has announced plans for a first San Francisco spa in 2027.
However, the prototype is far from regulatory clearance. Midjourney plans to initially offer detailed body-composition scans and will submit data to the FDA if it seeks to expand into medical diagnostics. Founder David Holz told Business Insider that pricing and data privacy policies are still being determined.
Butterfly's core business remains point-of-care ultrasound, competing with GE HealthCare's Vscan Air, Philips' Lumify, and Clarius handhelds. The company's semiconductor approach aims to make ultrasound devices cheaper and more portable. In the first quarter of 2026, Butterfly reported revenue of $26.5 million, up 25% year-over-year, but still posted a net loss of $12.7 million. For full-year 2026, management guided revenue between $117 million and $121 million and an adjusted EBITDA loss of $21 million to $25 million.
Market enthusiasm has already priced in potential future revenue from the Midjourney deal, even though commercialization remains uncertain. Butterfly's own risk factors highlight the dependence on Midjourney's ability to manufacture, obtain regulatory clearance, and sell the scanner. Medical experts quoted by Business Insider cautioned that frequent full-body scans could lead to false positives, patient anxiety, and unnecessary follow-ups unless conducted in a clinical setting.
With U.S. markets closed Friday for Juneteenth, trading resumes next week. Investors will be watching for more details on FDA timelines, production capacity, chip supply agreements, and whether Midjourney's scanner can secure reimbursement and demonstrate clinical utility. A flashy prototype alone may not sustain the stock's momentum without tangible progress toward commercialization.
