Craig-Hallum Initiates Coverage of Butterfly (BFLY) With a Buy Rating

Butterfly Network, Inc. (NYSE:BFLY) is one of the top 10 healthcare AI stocks to buy according to hedge funds.

Craig-Hallum analyst Chase Knickerbocker has initiated coverage of Butterfly Network, Inc. (NYSE:BFLY) with a Buy rating and a $3 price target, citing the company’s disruptive position in the point-of-care ultrasound market. Butterfly’s proprietary technology replaces traditional piezoelectric crystal-based ultrasound components with a chip-based semiconductor platform, allowing for a single probe to handle multiple imaging needs. This innovation not only reduces manufacturing complexity and cost, but also enables rapid software-driven improvements that set Butterfly apart from most handheld competitors.

A doctor looking at a ultrasound system with a Compass software interface, demonstrating the sophistication of the device.

The firm’s outlook is underpinned by Butterfly’s expanding direct-to-consumer (DTC) reach and a growing number of institutional partnerships, including leading health systems and academic centers. These relationships are expected to drive consistent hardware sales while building recurring revenue from software subscriptions.

Butterfly Network’s technology also places it at the forefront of healthcare’s digital transformation. By combining advanced imaging with real-time data interpretation and cloud-based collaboration tools, the company is integrating AI into clinical workflows to enhance diagnostic speed and accuracy.

While we acknowledge the potential of BFLY to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BFLY and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.