Intuitive Surgical: a comforting stock for troubled times
Intuitive Surgical, the global leader in robotic surgery, is well placed to keep growing. Should you buy in?
In times of uncertainty, it is comforting to have in your portfolio some substantial, growing companies with leading market shares in stable sectors such as healthcare. A good example is Intuitive Surgical (Nasdaq: ISRG), the global leader in robotic surgery. Intuitive Surgical has more than 11,000 of its da Vinci robotic surgery systems and over 1,000 of its Ion robotic endoluminal biopsy/minor procedure systems installed in hospitals in 70 countries worldwide. The surgeon controlling one of these systems sits at a console with a magnified three-dimensional view of the operating site and controls instruments that have a greater range of motion than the human hand.
Intuitive Surgical has a 60%-70% market share globally of the installed base of robotic surgery systems and a share of about 80% of general soft-tissue systems (excluding niches such as orthopaedics). The market for robotic surgery is growing from a predicted $16 billion in 2026 to $64 billion in 2035, a compound annual growth rate (CAGR) of 16.5%.
Intuitive Surgical has a wide moat
Intuitive Surgical has four features that amount to a wide moat protecting its dominant market share. First is its substantial investment in the research and development of new products – more than $1.3 billion in 2025 – including fifth-generation da Vinci systems that are now in production. Second is its set of more than 4,500 patents protecting its high-tech systems from being copied by competitors.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Third is its unparalleled surgical database gained from more than 20 million surgical procedures carried out using da Vinci systems. This database is used continuously to improve the AI and software incorporated into Intuitive's systems.
Finally, there's Intuitive's da Vinci robotic surgery training scheme, which has trained more than 66,000 surgeons around the world. Surgeons trained on da Vinci systems who plan to move to a new hospital naturally ask that hospital to install a da Vinci system.
Additionally, there are three factors driving further growth. The first is the advantage of robotic surgery over conventional surgery; it is minimally invasive (keyhole) surgery, which ensures shorter hospital stays and improved patient outcomes (for example, fewer complications). That is why robotic surgery is growing at a CAGR of 16.5% .
The second is the application of robotic surgery to more procedures ever since the first two procedures – gall bladder removal and prostatectomy – were approved by the US regulator in 2000. For example, the early 2026 regulatory approval given to da Vinci 5 systems for nine different cardiac procedures clears the way for 160,000 minimally invasive heart procedures in the US and Korea alone.
The third is the extension of Intuitive's reach to more hospitals and more countries. A country is usually served by distributors initially, but as business grows Intuitive starts to serve customers directly to provide a more comprehensive service. In March 2026, Intuitive began direct operations in Italy, Spain, Portugal and Malta by acquiring the existing distributors there. This is likely to result in faster growth.
Intuitive Surgical's 2025 results show revenues up by 20.5% to $10.065 billion. Pre-tax profit was $3.31 billion, up 23.8%. Diluted earnings per share for 2025 was $7.87, up 22.6%. The balance sheet is strong, with more than $9 billion in net cash. Strong growth continued in the first quarter of 2026, with revenue up 23% compared with the first quarter of 2025. Keep buying.
How Intuitive Surgical has performed
This base is important as about three-quarters of revenue comes from instruments, accessories and services. This revenue increases as the number of surgical procedures carried out on the machines rises. In the first quarter of 2026, revenue was $2.77bn, up 23% on the same period the year before, with da Vinci procedures up 16% and Ion procedures up 39%. And the recent approvals for nine new cardiac procedures using da Vinci 5 could add another 160,000 procedures in the US and Korea alone.
The installed base rose with new sales – 431 da Vinci systems and 52 Ion systems were placed in the first quarter of 2026. The total for da Vinci systems included 232 da Vinci 5 systems compared with 147 in the same period last year. The new direct sales organisation for southern Europe should enhance sales there.
Intuitive Surgical expects a gross profit margin of 67.5%-68.5% of revenue compared with 67.6% in 2025 (on a non-GAAP basis). This includes the impact from tariffs of 1% of revenue. Given that Intuitive has a history of under-promising and over-delivering, this implies that the ex-tariff margin is likely to rise.
Most of the 38 analysts covering the stock rate it a “buy” (19) “overweight” (6), with 11 opting to “hold”. The forward price-earnings (p/e) ratio for 2027 at the recent price of $420 is 36.7 falling to 31.6 for 2028. The average one-year target price is $582. There is no dividend, but the firm's strong financial position enabled it to spend $2.3 billion on share buy-backs in 2025, which supported the share price. This is a profitable growth stock worth adding to your portfolio.
Dr Michael Tubbs owns shares in Intuitive Surgical
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
