CK Capital
Defense/Space/Tech/Photonics Investor, Co-Owner of CV Research
Butterfly Network is the picks-and-shovels play on the Midjourney Scanner, since every scanner runs on 40 of its Ultrasound-on-Chip modules. Midjourney brings the software and brand while Butterfly supplies the imaging physics under a license worth up to $74 million over five years. Midjourney targets 50,000 scanners and a billion scans a month by 2031, future versions use more modules each, and Butterfly gets paid on every unit. x.com
Butterfly Network's silicon-based ultrasound could turn specialist imaging into a home device that improves as scans and outcomes train its AI. That iPhone-like shift depends on crossing the harmonics gate; Apple reached $5T thanks to the iPhone, while Butterfly trades at $2B and could similarly change how we see inside our bodies. x.com x.com
Medical stocks such as Hyperfine and Butterfly Network could see rotation soon, as Wall Street eventually catches on to the boom AI is driving across all aspects of medicine. x.com
Butterfly Network looks overpriced for its Midjourney deal, because the licensing structure caps how much of that vision reaches Butterfly. Midjourney pays $15M upfront plus $10M a year for its ultrasound-on-chip, but chip sales are one-time per scanner and the revenue share ties to hardware, not scans. Even 50,000 scanners might lift revenue only 10–70%, back-loaded. At about 14x trailing sales, with EBITDA losses expected and insiders selling, the vision is option value, not a base case. x.com
Butterfly Network's opportunity from Midjourney's full-body ultrasound plan looks dubious, because ultrasound cannot replace CT as promoted. Midjourney plans water-pool scanning spas in San Francisco from 2027 for body composition only, with no medical diagnosis, costly water treatment that limits throughput and significant capex to recoup. Butterfly could still benefit if VC-funded AI firms keep spending irrationally, but that looks difficult at its current valuation. x.com
Butterfly Network is expensive against its sales. At $7.80 it trades at 17x sales and 13x next year's, while medical-device makers usually get 8x. Fair value runs $4.73 to $6.02, about 8x next year's sales, so buyers pay roughly 30% over fair. This is a valuation read only, off reported earnings and revenue estimates, with no fundamental work. x.com
