Recently, there has been a major development in the healthcare sector. A medical device company called PAVmed Inc. (NASDAQ: PAVM) has caused a market frenzy after securing a contract with the U.S. Department of Veterans Affairs.

What exactly happened? PAVmed's subsidiary, Lucid Diagnostics, developed the EsoGuard testing technology—used for early screening of precancerous esophageal conditions—and it has been incorporated into the U.S. Veterans Affairs system. When this news broke on January 21, PAVM's stock price surged by over 300% intraday. Trading volume skyrocketed from $195,100 the previous day to $1.014 billion, an astonishing increase of 51.97 million times. Yes, you read that right—multi-million-fold growth.

How crazy was the market reaction? The stock rose over 190% before the market opened, and by the close, it stabilized with a gain of 94.67%, closing at $12.05. The stock of Lucid Diagnostics also soared, jumping over 28% pre-market. Trading activity was unprecedented, with volume reaching 54.1672 million shares.

However, you should know that this company has been mired in losses for a long time, and this government contract is essentially a lifeline. But market sentiment is highly volatile, and the stock has pulled back significantly from its high. Investing in the healthcare sector requires a clear understanding of the fundamentals; policy incentives can trigger short-term rebounds, but sustained growth depends on the company's competitiveness and profitability prospects.