4DMedical Ltd (ASX: 4DX) shares are trading in the red again in Wednesday lunchtime trade. At the time of writing, the shares are 2.75% lower at $4.24 a piece.
Since peaking at an all-time high of $5.20 per share on Monday morning this week, 4DMedical shares have crashed 20%.
For the year to date, the shares are now down 6.61%. But thanks to an enormous 1,470.37% gain over the past 6 months, the shares are still 643.86% higher than this time last year.
In the grand scheme of things, when discussing a 600%+ annual gain, a 20% decline this week doesn't look like much. But it does make you question, is the price rally for one of 2025's fastest-growing stocks on the planet finally over?
What has driven the 4DMedical share price higher over the past year?
The healthcare technology company is focused on advanced respiratory imaging.
Its flagship product, CT:VQ, uses software to convert standard CT scans into detailed functional lung images. The technology helps diagnose and monitor conditions such as pulmonary embolisms, chronic obstructive pulmonary disease, and other respiratory illnesses.
4DMedical rocketed to success in August last year following some successful partnerships and new commercial contracts. A run of positive financial results, increased adoption of the technology, and achieved milestones throughout sent the share price flying.
One of the biggest catalysts for the share price this year has been accelerating adoption in the United States. In early January, the company announced that UC San Diego Health had begun clinical adoption of its flagship CT:VQ product. There has already been uptake by major institutions, such as Stanford University, the Cleveland Clinic, and the University of Miami.
Why has the stock plunged over the past two days?
There has been no price-sensitive news out of the company this week to explain the price drop. Given that 4DMedical's share price has increased so strongly over the past 6 months, it's likely that the latest decline is investors taking their gains off the table.
The question is, does this present a great opportunity for investors to get into the stock? Or will more follow suit and send the share price south?
Time to panic or a buying opportunity?
In 2026, 4DMedical plans to focus on accelerating the rollout of its CT:VQ imaging product. This will be through strategic partnerships and new contracts. The company hopes that 2026 will be a transformative year driven by increased product adoption and long-term commercial growth.
The problem is, 4DMedical is still in its infancy, and it isn't profitable yet. The business is mostly forecast to break even in 2026, so it has its work cut out to reach the level of growth needed to keep its shares on the same trajectory.
TradingView data shows analysts have a consensus buy rating on the stock, but target prices are significantly below the current trading price and most likely out of date, given how fast the stock has climbed over the past couple of months.
My gut is that there will be more to come from 4DMedical shares this year. But I expect volatility ahead as we enter the next growth phase.
