What happened

Shares of the diabetes-oriented medical device maker DexCom (DXCM -3.78%) are tanking in lockstep with the broader market today. Specifically, DexCom's stock was down by an eye-catching 13.8% as of 10:37 a.m. EDT Monday morning.

DexCom, along with most other U.S. stocks, is reacting negatively to both the Federal Reserve's emergency rate cut over the weekend and the fallout resulting from the continued spread of COVID-19 across the globe. The bottom line is that the global economy appears headed for a prolonged rough patch. In turn, investors are selling off stocks this morning, presumably in favor of cold hard cash.  

A doctor holding a sign with the word "diabetes."

Image source: Getty Images.

So what

DexCom was one of the hottest growth stocks in the entire healthcare sector prior to this dramatic sell-off. Fueled by skyrocketing sales of its G6 continuous glucose monitoring (CGM) system, the company's shares were up by nearly 90% year-over-year at the start of March. As such, DexCom's stock might be getting singled out for particularly harsh punishment today. In brief, the company's shares were trading at an astronomical 94 times next year's projected earnings at one point earlier this month, thanks to its meteoric rise over the course of 2019 to early 2020.   

Now what

Should bargain hunters take advantage of today's weakness? The short answer is no. DexCom's game-changing CGM system has been selling like hot cakes, but a noteworthy portion of this growth has been coming from international markets in recent quarters. Unfortunately, there's no way to predict how COVID-19 will impact the sales of medical devices abroad. Thus, it might be best to watch this falling knife from the safety of the sidelines for the time being.