Track market-moving stories before they get noisy

Key Takeaways Intuitive Surgical's forward P/E has fallen to 30.26X, well below its 10-year median of 58.18X.ISRG posted 19% Q2 revenue growth, 28% adjusted EPS growth and 16% higher total procedures.da Vinci 5, SP and Ion adoption support growth, while U.S. moderation, China and costs remain risks. Intuitive Surgical (ISRG - Free Report) is trading at its cheapest valuation in the last 10 years following a decline of more than 40% after touching the $600 level in January this year. Its forward 12-month P/E of 30.26X is well below its 10-year median of 58.18X and high of 93.22X, although it remains above the Medical - Instruments industry’s 25.96X. The compression is notable given that ISRG continues to generate strong growth, but investors are increasingly factoring in moderating U.S. procedure trends, competitive pressure in China, higher costs and uncertainty around hospital capital spending. Its Value Score of D also indicates that the stock is not yet considered inexpensive despite the steep multiple contraction.

The latest quarter illustrates the disconnect between valuation and fundamentals. Second-quarter 2026 revenue increased 19% year over year to $2.89 billion, and adjusted EPS advanced 28%. Total procedures rose 16%, with da Vinci procedures increasing 15% and Ion procedures jumping 36%. Recurring revenue climbed 19% to $2.47 billion and represented 85% of total revenue. Utilization also remained healthy, increasing 3% for da Vinci and 11% for Ion.

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Forward Guidance Points to Durable Growth Despite ModerationManagement maintained its 2026 da Vinci procedure-growth forecast at 13.5-15.5%, expecting results toward the midpoint. General surgery in the United States and procedures outside urology internationally remain the principal growth drivers. Importantly, the outlook continues to reflect several near-term uncertainties, including changes in U.S. patient behavior following ACA premium-subsidy changes, China's tender volumes and competitive intensity, European capital pressures, Japan's recovery and the impact of obesity drugs.

There are encouraging developments beneath this guidance. International da Vinci procedures grew 20% in the second quarter, with Europe and Asia each advancing 20%, while the rest of the world increased 22%. This compares favorably with the first quarter, when international da Vinci procedures grew 19%. Japan also recorded improved system placements following favorable reimbursement decisions.

However, margin expansion is not guaranteed. Intuitive Surgical raised its 2026 adjusted gross-margin outlook to 68-69% from 67.5-68.5%, but continues to face higher freight and semiconductor-memory costs, faster growth of newer platforms and higher depreciation. Thus, the guidance supports continued growth but also indicates that investors should expect elevated spending and some profitability pressure during the platform transition.

Product Innovation Expands Long-Term OpportunityIntuitive Surgical's product pipeline provides a strong counterweight to near-term concerns. The company placed 468 da Vinci systems and 55 Ion systems in second quarter, while more than 1,700 da Vinci 5 systems are now installed. More than 100 planned da Vinci 5 updates are being rolled out, including improvements to telepresence, simulation-based training and care-team workflows.

The single-port platform is gaining traction rapidly, with SP procedures increasing 61% and its global installed base reaching 445 systems. Ion procedures rose 36% to 48,000 and have surpassed 400,000 cumulatively. The company is also progressing with ROSE and EBUS programs and has submitted a next-generation flexible robotic endoscope for FDA clearance.

These innovations strengthen ISRG's competitive position against lower-valued peers such as Medtronic (MDT - Free Report) and Stryker (SYK - Free Report) . MDT trades at 15.13X forward P/E, while SYK trades at 17.02X, both substantially below ISRG's 30.26X. Yet Medtronic's Hugo remains in an earlier commercialization phase, with management expecting more than 50,000 completed procedures by the end of its fiscal year, while Stryker's Mako has surpassed 2.5 million procedures globally across 47 countries.

Share-Price MovementISRG shares have declined 15% over the past three months against the Zacks Medical – Instruments industry's 10% growth. The broader Medical sector has jumped 9.6% during the same period, leaving Intuitive Surgical lagging both its industry and the wider medical sector.

While Medtronic shares have gained 15.1% in the past three months, Stryker declined 10.5%.

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Bottom LineISRG's valuation has clearly become more reasonable after the sharp share price decline, but the stock does not yet qualify as an outright bargain given its premium to the industry and D Value Score. The investment case rests on whether sustained procedure growth, da Vinci 5 adoption, higher utilization and expansion of SP and Ion can offset slower U.S. growth, China-related challenges, obesity-drug pressure and elevated costs.

For existing investors, the current risk-reward appears balanced enough to hold the stock rather than exit after the valuation reset. ISRG's current valuation makes the shares considerably cheaper than their historical valuation. However, prospective investors may want evidence of accelerating procedure growth and further margin improvement before committing aggressively. The company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

Key Takeaways Intuitive Surgica's Ion procedures rose 36% year over year to 48,000 in the second quarter.Ion's installed base grew 21%, while availability expanded to 12 countries outside the United States.ROSE and EBUS could broaden Ion's pulmonary diagnostic capabilities and expand its addressable market. Intuitive Surgical’s (ISRG - Free Report) Ion robotic platform is increasingly emerging as a meaningful second growth engine alongside the company’s core da Vinci franchise. In the second quarter of 2026, Ion procedures increased 36% year over year to 48,000, demonstrating that adoption is accelerating even as the much larger da Vinci platform continues to dominate Intuitive Surgical’s procedure base. Cumulative Ion procedures have now surpassed 400,000, providing a growing body of clinical experience that can support physician confidence, training and broader adoption.

Ion’s installed base rose 21% year over year, creating a larger foundation for recurring procedure growth and expanding adoption among hospitals and physicians. Intuitive is also expanding Ion internationally, with the system now available in 12 countries outside the United States. This broadens its geographic growth runway and reduces reliance on domestic procedure growth.

The longer-term opportunity is particularly compelling because Ion is positioned around lung cancer diagnosis, an area where earlier and more accurate detection can potentially improve patient management. Lung cancer is the second fastest growing cancer type globally, indicating a robust growth potential.

Management continues to invest in technologies designed to expand Ion’s clinical utility, including ROSE and EBUS. These programs are designed to enhance the platform’s pulmonary diagnostic capabilities and potentially expand the range of procedures that can be performed using the Ion ecosystem.

From an investment perspective, Ion’s importance extends beyond its current revenue contribution. The combination of rapid procedure growth, a rising installed base, international expansion and additional diagnostic capabilities creates strong potential for compounding growth.

If ROSE and EBUS broaden clinical applications, Ion could evolve into a more comprehensive lung-diagnostic ecosystem. This would broaden its addressable market, strengthen Intuitive Surgical’s technology moat and create another platform for sustained procedure growth and recurring instrument-and-accessory revenues.

Peer Updates

Medtronic’s (MDT - Free Report) next growth engine is a portfolio of newer platforms, with Cardiac Ablation Solutions (“CAS”) standing out. CAS sales grew 88% in the first quarter of fiscal 2027, supported by Sphere-9, whose U.S. market share increased nine points sequentially. Management expects CAS to grow more than 2.5x the mid-teens market.

Robotics is another key growth driver with strong potential. Medtronic is complementing its Hugo platform with Touch Surgery Aide, enhanced instrumentation and Cornerstone’s Sentire system in select international markets.

In spine, AiBLE ecosystem and Stealth AXiS are early-stage growth drivers, while Symplicity’s transradial catheter could accelerate renal denervation adoption. Together, these platforms provide Medtronic with multiple avenues to gain market share and expand its addressable market.

Boston Scientific’s (BSX - Free Report) strongest future growth engine appears to be its electrophysiology (EP) portfolio, where next-generation products are designed to broaden both its ecosystem and addressable patient population.

Boston Scientific plans to launch FARAPULSE Ultra at scale in 2027 while expanding into the rapidly growing ICE market. The company is also developing next-generation FARAFLEX Ultra platform, which is likely to be available in 2028. These launches should complement FARAPOINT and existing FARAPULSE capabilities, with management expecting EP growth to strengthen in late 2027 and 2028.

Boston Scientific is expected to close the acquisition of Penumbra in the second half of 2027, which is likely to add growth drivers beyond EP. Penumbra’s portfolio is expected to strengthen cardiovascular growth following its planned acquisition, while the MiRus investment provides an option to enter TAVR.

ISRG’s Price Performance, Valuation and Estimates

Shares of ISRG have lost 35.3% so far this year compared with an 8.6% decline of the industry.

Image Source: Zacks Investment Research

From a valuation standpoint, Intuitive Surgical trades at a forward price-to-earnings ratio of 31.71X, above the industry average. However, it is significantly lower than its five-year median of 68.26X. ISRG carries a Value Score of D.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Intuitive Surgical’s 2026 earnings implies a 20.3% rise from the year-ago period’s level.

Image Source: Zacks Investment Research

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Intuitive Surgical (ISRG -0.85%) is a volatile stock to own. Since its initial public offering, the stock has suffered eight drawdowns of 30% or more. Two of the drawdowns were over 70%. Right now, the stock is in the middle of a drawdown that has it off its recent highs by roughly 40%.

Historically, the stock has recovered from each drawdown and gone on to higher highs. That suggests that the current sell-off is a buying opportunity. However, there have been big changes in the surgical robotics space that investors have to consider, as well. Here's a look at whether or not Intuitive Surgical is worth buying today. (Hint: Selling new robots isn't the biggest piece of the story.)

Image source: Getty Images.

Intuitive Surgical: Growth isn't what it used to be Intuitive Surgical was a pioneer in the surgical robots space, with its da Vinci system being one of the first and most widely available options. Being early allowed the company to grow its business at a fairly rapid clip. The fact that robot-assisted surgery generally requires smaller incisions and leads to better outcomes was a big selling point. Early on, investors tracked the company's da Vinci sales very closely, and they still do.

The sale of new da Vinci robots is important. But the market has new entrants, including medical device giants like Medtronic (MDT +1.15%) and Johnson & Johnson (JNJ -1.15%). These are well-heeled competitors with strong industry connections. The playing field is much different now than it was two decades ago. Simply put, there's more competition. So it makes sense that Intuitive Surgical's business would slow down a bit.

It is still selling da Vinci systems, noting that it placed 468 in the second quarter of 2026, up from 395 in the second quarter of 2025. But Wall Street clearly wasn't pleased, given the sell-off in the shares.

ISRG data by YCharts

What's interesting is that the first number the company talks about isn't new da Vinci placements; it is the number of surgeries performed with da Vinci robots. The number of surgeries rose 16% year over year, even though the number of da Vinci systems being used globally increased by 12%. That difference is very important.

The flywheel is parts and services Intuitive Surgical breaks down its revenues across new robot sales, services, and instruments and accessories (basically, parts). New robot sales accounted for only around 24% of total sales in the second quarter of 2026. So 75% of the company's top line comes from maintaining the surgical robots it already has in place.

These are annuity-like income streams that will remain in place until those da Vinci systems are no longer being used. Given the cost of a surgical robot and the demand for robotic surgery, it is unlikely that a hospital will prematurely shut down a da Vinci robot just to switch to a competitor's surgical robot. So growth may slow down, but the core of the business remains strong.

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And then there's the opportunity from continued technological advances. Most notably, artificial intelligence (AI) is already being used to assist surgeons. It doesn't seem unrealistic to believe that AI could perform basic surgery on its own someday. That would greatly increase access to medical care globally. In other words, there are still opportunities for Intuitive Surgical to grow. Perhaps that growth won't be as rapid, but so long as it continues to sell new da Vinci systems, its annuity-like parts-and-services business will grow even more powerful.

Intuitive Surgical looks historically cheap Intuitive Surgical is best suited to more aggressive growth investors. So conservative types should probably avoid the historically volatile stock. But, if you can stomach big price swings, history suggests that large drawdowns are a buying opportunity. And, notably, the stock's price-to-sales, price-to-earnings, and price-to-book ratios are all below their five-year averages. So, too, is the price-to-forward earnings ratio, which accounts for Wall Street's growth expectations. Basically, the current drawdown has left this growth stock looking cheap again.

Key Takeaways ISRG's first-half 2026 free cash flow surged 71% to $1.8B, while cash and investments hit $8.6B.ISRG is growing R&D faster than SG&A and plans more than 100 updates for the da Vinci 5 platform.ISRG is advancing a flexible robotic GI endoscope and investing across AI, robotics, imaging and materials. Intuitive Surgical's (ISRG - Free Report) surging cash generation is giving it a meaningful competitive edge as the robotic surgery leader doubles down on innovation. First-half 2026 free cash flow jumped 71% year over year to $1.8 billion, while cash and investments reached $8.6 billion, providing ample financial flexibility to fund research, manufacturing expansion and shareholder returns without compromising growth initiatives.

Management is using that financial strength to widen its technology moat. ISRG is intentionally growing R&D faster than SG&A, expanding manufacturing capacity with new hiring and facility investments, and rolling out more than 100 planned updates for the da Vinci 5 platform. The company is also advancing next-generation programs, including a flexible robotic GI endoscope, while supporting innovation across AI, robotics, imaging and advanced materials. Alongside these investments, ISRG repurchased $379 million of stock during the quarter, underscoring confidence in its long-term outlook.

Peers UpdateBoston Scientific (BSX - Free Report) delivered another solid quarter, with second-quarter 2026 revenues rising 7.5% to $5.44 billion and adjusted EPS climbing 15% to 86 cents. Growth was driven by strength across Interventional Cardiology, Neuromodulation and Vascular businesses, while the company continued investing in future platforms, including SEISMIQ IVL, hypertension therapies and FARAWAVE Ultra. However, management trimmed its full-year outlook as WATCHMAN and electrophysiology pressures weighed on near-term expectations.

Medtronic (MDT - Free Report) continues strengthening its electrophysiology franchise through innovation. The company secured an expanded CE Mark for the Affera Mapping and Ablation System with the Sphere-9 catheter to treat ventricular arrhythmias, making it the first all-in-one mapping and ablation, dual-energy catheter approved in Europe for ventricular ablation. Medtronic also received FDA Breakthrough Device Designation for the technology, while its U.S. Sphere VT pivotal trial is enrolling patients, positioning the platform for future market expansion in a fast-growing cardiac ablation segment.

ISRG’s Price Performance, Valuation and EstimatesShares of ISRG have lost 34.6% in the year-to-date period compared with the industry’s decline of 6.9%.

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From a valuation standpoint, ISRG trades at a price-to-book ratio of 7.15, above the industry average. ISRG carries a Value Score of D.

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The Zacks Consensus Estimate for ISRG’s 2026 earnings implies a significant 20.3% improvement from the year-ago period.

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The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Intuitive Surgical (ISRG +0.22%) is a leading company in the robotic-assisted surgical space. Its da Vinci machines are widely used, and surgeons have performed millions of procedures with them. Intuitive has significant growth potential, as it could help revolutionize the healthcare industry.

This year, however, the healthcare stock has been nosediving. It's down around 30% thus far in 2026, and if that doesn't improve, it'll be its worst performance since 2008.

What's wrong with Intuitive Surgical stock, and is it heading even lower, or could now be an opportune time to load up on this growth stock?

Image source: Getty Images.

Intuitive's recent numbers didn't do enough to give investors confidence in the businessIn July, Intuitive reported its second-quarter earnings, covering the period through to the end of June. While the healthcare business posted double-digit growth, investors appeared unimpressed by the guidance.

While worldwide procedure growth in Q2 was solid at 16% and revenue was up 19%, investors may have been taken aback by the guidance: for the full year, the company is projecting da Vinci procedure growth within the range of 13.5% to 15.5%.

This is particularly concerning, as increased competition could erode Intuitive's market share in the future. Healthcare giant Johnson & Johnson recently obtained clearance from regulators for its Ottava robotic surgical system to be used in various soft tissue surgeries. Last year, medical device company Medtronic also obtained clearance for its Hugo robotic-assisted surgery system.

While Intuitive has a massive head start, news of greater competition ahead and the business reporting underwhelming growth may have sparked significant concerns for Intuitive's investors, especially as this isn't a cheap stock to own.

A high valuation may put more downward pressure on Intuitive's stockThe big problem with Intuitive's stock in recent years has been its incredibly high valuation, with it not uncommon to see the stock trade at around 80 times its trailing earnings. When a stock's valuation is that high, expectations will also be inflated. And if a company doesn't meet them, it can raise questions about whether the premium is justified, and investors may be thinking twice about that right now with Intuitive's stock.

Unfortunately, even with the stock falling sharply this year, it may not be all that cheap. It's trading at 45 times its trailing earnings, and on a forward basis, based on how profitable analysts expect the business to be in the year ahead, it's trading at a multiple of 36. By comparison, the average stock in the S&P 500 trades at 26 times its trailing earnings, and 21 times its expected future profits.

Intuitive, still trading at a premium, may continue to come under pressure in the coming weeks and months.

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Is Intuitive's stock worth buying for the long haul?This year, Intuitive's stock is underperforming the market by a wide margin, whereas it has typically been a market-beating stock in the past. The sell-off this year is even worse than the 26% decline it experienced in 2022 when the market crashed. If it stays around 30%, it'll be the worst single-year performance for Intuitive since 2008. That year, it crashed by nearly 61%.

The good news for investors, however, is that the robotic-assisted surgical market offers tremendous opportunities, and Intuitive isn't running out of room to grow anytime soon, even with increased competition. It may, however, require patience from investors, as the stock's valuation and modest growth could make it difficult for it to recover from the current headwinds.

Intuitive's stock was overvalued for a long time, and a correction was arguably long overdue. For investors willing to remain invested and hang on for the very long haul (i.e., more than just a few years), Intuitive may be a good buy right now.

Key Takeaways Intuitive Surgical's U.S. procedure growth slowed to 12% in Q2 from 14% in Q1 and 17% in Q4 2025.ACA coverage changes affected timing for some deferrable procedures, while disease burden remains unchanged.Intuitive Surgical maintained 2026 procedure growth guidance of 13.5-15.5%, targeting the midpoint. Intuitive Surgical (ISRG - Free Report) has faced a moderation in U.S. procedure growth during the first half of 2026, but management’s commentary suggests the slowdown is more likely a temporary demand-timing issue than evidence of a structural deterioration. U.S. da Vinci procedures grew 12% in the second quarter, down from 14% in the first quarter. da Vinci procedure growth was 17% in the fourth quarter of 2025.

Management pointed to a modest adverse impact from the expiration of enhanced ACA premium subsidies. Customer feedback indicated that changes in insurance coverage and premium dynamics affected the timing of patient visits, particularly for procedures that can be postponed.

Intuitive Surgical also stated that the underlying disease burden remains unchanged, implying that deferred benign procedures should eventually return as patients re-enter the healthcare system. Management also noted that the procedure moderation likely reflected a combination of ACA-related effects and the “law of large numbers,” rather than a single factor. The distinction between deferrable and non-deferrable procedures was particularly important, with the former showing greater moderation.

For the second half, investors should nevertheless expect some pressure on reported growth. Intuitive Surgical maintained its 2026 da Vinci procedure growth forecast of 13.5-15.5%, expecting performance toward the midpoint. Management flagged tougher U.S. comparisons in the third quarter, alongside seasonal effects internationally, while incorporating ACA-related patient behavior into its outlook.

At this stage, the slowdown does not appear structural. U.S. utilization still increased 3%, while system placements rose 24%, and management said ACA concerns had not affected the capital pipeline. Strong adoption of da Vinci 5 continues to support upgrades and capacity expansion. The key risk is the duration of deferred procedures, rather than weakening underlying demand for robotic surgery.

Peer UpdatesGlobus Medical’s (GMED - Free Report) robotic platform faced a softer Enabling Technologies quarter, with revenues declining 26% year over year to $26.1 million. The company attributed the decline primarily to its shift toward greater flexibility in capital acquisition, rather than explicitly citing ACA premium-subsidy changes.

Despite lower capital revenues, demand for Excelsius technology remained healthy. EGPS and eHub units deployed through sales, leases or rentals rose 25% year over year, while robotic utilization surpassed 137,000 procedures. Management also acknowledged tougher second-half comparisons and remained cautious on its outlook because of Enabling Technologies’ strategy shift and Nevro integration.

Stereotaxis’ (STXS - Free Report) robotic business continues to face commercialization and procedure-related headwinds, but management did not specify any headwind from ACA premium subsidy expiration. Revenues declined 13% year over year to $7.7 million, partly because no robotic system was delivered during the quarter.

Management also cited “general pressure on procedures” as the company transitions from Johnson & Johnson and ramps up its own catheter manufacturing. Catheter supply constraints remain a bigger near-term bottleneck as demand exceeds available production, limiting shipments despite customer orders. STXS’ robotic growth is currently constrained more by product availability, hospital adoption, and procedure volumes than by any clearly identified impact from ACA subsidy changes.

ISRG’s Price Performance, Valuation and EstimatesShares of ISRG have lost 29.2% so far this year compared with a 6.8% decline of the industry.

Image Source: Zacks Investment Research

From a valuation standpoint, Intuitive Surgical trades at a forward price-to-earnings ratio of 34.95X, above the industry average. But it is significantly lower than its five-year median of 69.05X. ISRG carries a Value Score of D.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Intuitive Surgical’s 2026 earnings implies a 20.3% rise from the year-ago period’s level.

Image Source: Zacks Investment Research

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Intuitive Surgical placed 246 da Vinci 5 systems as the installed base topped 1,700 systems.ISRG began rolling out the first of 100-plus software updates and filed new FDA 510(k) features.Intuitive Surgical expects da Vinci 5 upgrades to build over years, similar to the da Vinci Xi cycle. Intuitive Surgical's (ISRG - Free Report) second-quarter 2026 results suggest that the da Vinci 5 platform is evolving into more than a routine product refresh. It appears to be laying the foundation for a multi-year capital upgrade cycle driven by software innovation, clinical capabilities and a growing installed base.

The momentum was evident in the quarter's capital performance. Intuitive Surgical placed 468 da Vinci systems globally, including 246 da Vinci 5 systems, while the installed base of the latest-generation platform surpassed 1,700 systems. More than 15,000 surgeons have already used da Vinci 5 since its launch, indicating rapid physician adoption that could encourage additional hospitals to modernize their robotic surgery programs. Trade-ins also accelerated to 144 systems from 83 a year earlier, largely reflecting U.S. customers upgrading from older platforms.

Unlike previous hardware-centric product launches, da Vinci 5 has been designed as a software-enabled platform capable of continuous enhancements. During the quarter, Intuitive Surgical rolled out the first phase of more than 100 planned software updates focused on telepresence, simulation-based training and care-team workflow. The company also submitted multiple new features for FDA 510(k) clearance, reinforcing management's strategy of steadily expanding the platform's capabilities rather than relying on a single launch event.

Management also drew parallels with the successful da Vinci Xi upgrade cycle. The Xi transition required roughly seven years to reach peak trade-in volumes, and executives expect the da Vinci 5 upgrade cycle to follow a similarly progressive, multi-year path. As software updates continue to enhance the ecosystem, management believes the platform will become increasingly attractive to existing customers over time.

Notably, hospitals continue to invest despite macroeconomic concerns. Management described the U.S. capital environment as stable, with a healthy pipeline supported by leasing, which accounts for roughly 70% of U.S. system acquisitions. The company noted that customer interest in accessing the latest da Vinci 5 technology, higher utilization and additional system capacity have outweighed concerns surrounding healthcare reimbursement and broader economic uncertainty.

Peer UpdatesEdwards Lifesciences (EW - Free Report) is positioning itself for a multi-year product upgrade cycle through continuous innovation across its structural heart portfolio rather than relying on a single platform. Management highlighted several near-term catalysts, including the next-generation SAPIEN X4S platform currently in the ALLIANCE trial, an anticipated U.S. TAVR National Coverage Determination update, new PASCAL Capture Clarity technology, a U.S. tricuspid indication for PASCAL, the rollout of ECLIPTIS, and continued expansion of EVOQUE and SAPIEN M3.

The company believes these product launches, indication expansions and growing clinical evidence will gradually broaden patient access, reinforce physician adoption and support durable product refresh cycles and long-term structural heart growth.

Glaukos (GKOS - Free Report) is building a long-term upgrade cycle through a diversified ophthalmology pipeline spanning multiple therapeutic platforms. While iDose TR and Epioxa remain the company's primary commercial growth engines, management is advancing iDose TREX, iDose TRIO, a keratoconus screening device, third-generation customized iLink therapy, PRESERFLO MicroShunt, additional iStent infinite indications, an iLution therapy for Demodex blepharitis and GLK-401 for retinal disease.

The company also continues expanding Phase IV clinical evidence and commercial infrastructure to support adoption. Management believes that its pipeline programs can create successive innovation cycles, expand treatment paradigms and sustain growth well into the next decade.

ISRG’s Price Performance, Valuation and EstimatesShares of ISRG have lost 33.8% so far this year compared with a 10.7% decline of the industry.

Image Source: Zacks Investment Research

From a valuation standpoint, Intuitive Surgical trades at a forward price-to-earnings ratio of 32.74X, above the industry average. But, it is significantly lower than its five-year median of 69.11X. ISRG carries a Value Score of D.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Intuitive Surgical’s 2026 earnings implies a 20.3% rise from the year-ago period’s level.

Image Source: Zacks Investment Research

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Intuitive Surgical (ISRG +5.72%) has been one of the best growth stocks in the healthcare sector for years. It revolutionized surgical procedures with its da Vinci robotics-assisted surgery platform. So, when shares drop 44% from their high, investors notice. This is currently the stock's second-sharpest decline of the past decade.

But Wall Street hasn't lost faith in the stock. According to CNN Business, 71% of Wall Street analysts rate Intuitive Surgical stock as a buy. Based on 12-month price targets, shares could soar as much as 103%, while the median price target of $485 is about 43% above Intuitive Surgical's current price.

When you put the pieces together, it's clear why analysts remain bullish toward Intuitive Surgical: The stock's valuation has fallen drastically below its long-term average. Yet, it still dominates robotics-assisted surgery, and its new da Vinci 5 system is gaining momentum. All of this makes the stock an obvious rebound candidate. Here's what you need to know.

The da Vinci 5 is building momentum Intuitive Surgical is known for its da Vinci robotics platform, which assists surgeons with various surgical procedures. It launched the first da Vinci system in 2000. As you might guess, today's technology is far better than it was nearly 30 years ago. The company has released new generations of its da Vinci platform over the years, improving its capabilities and driving new system sales.

Image source: Intuitive Surgical.

The da Vinci 5 received FDA approval in the United States in March 2024 and continues to boost sales. Intuitive Surgical placed 468 da Vinci systems in Q2 2026, up from 395 the prior year. Of those, 246 (52%) were fifth-generation systems, versus 180 (45%) in Q2 2025. The higher mix of da Vinci 5 systems is driving higher average system prices.

More advanced systems also drive growth by making hospitals more efficient. Data from U.S. hospitals shows 11% higher utilization with da Vinci 5 systems compared to previous generations. In other words, hospitals can perform more procedures in less time, and do so more safely.

Selling systems isn't even the real business anymore It's obviously important that Intuitive Surgical continues to install more da Vinci systems in more hospitals. But systems aren't how the company actually makes most of its money at this point. Intuitive Surgical is a textbook razor-and-blade business, where the da Vinci is a large, up-front, one-time sale. Each installed system then generates years of recurring sales from parts, services, and maintenance.

The company currently has 11,710 da Vinci systems installed worldwide. The larger Intuitive Surgical's install base grows, the less system sales actually matter in the financials. System sales accounted for only 23.6% of total revenue in the second quarter. These recurring sales are more profitable than the systems, which is why the company's gross profit margins are consistently over 66%.

As more hospitals upgrade to the da Vinci 5, increased utilization will drive even more recurring sales of parts and services, as more procedures mean more supplies and maintenance. These are all little layers of compounding that all contribute to company-wide growth.

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If the business is doing well, why is the stock down? Naturally, reading all this optimism raises this very fair question. The answer might be pretty straightforward: price.

Intuitive Surgical has been an excellent business for a long time. As a result, investors have happily paid a premium for the stock. Shares have typically traded at around 64-65 times the company's trailing 12-month earnings throughout the past decade. Last year, the stock peaked at around 95 times earnings, an eye-poppingly high valuation, even for a stock that's typically always expensive.

The downfall from such high prices can be brutal when the market's momentum turns against a stock. Sure, Intuitive Surgical isn't perfect. Management has noted short-term margin headwinds, thanks to tariffs on components. Except now the stock is trading at only 38-39 times its earnings, well below its norms.

Is this a broken business? I don't think so.

The broader business is still growing, and there's no clear threat to its dominance in a lucrative robotics-assisted surgery market. Analysts see Intuitive Surgical growing earnings by an average of 15%-16% annually over the next three to five years. In all, analyst price targets simply reflect an excellent stock tracking higher, back toward its long-term averages. If you agree, it's a great time to consider buying and holding.

Key Takeaways ISRG's recurring revenue rose 19% to $2.47 billion, accounting for 85% of total revenue.Da Vinci and Ion procedures grew 16%, led by 36% Ion growth and a 61% increase in SP procedures.Intuitive Surgical faces slower U.S. growth, bariatric declines and pressure on China placements. Intuitive Surgical (ISRG - Free Report) remains a procedure-driven growth story built around robotic systems, instruments, services and software.

The central question for investors is whether da Vinci 5, SP, Ion and digital tools can keep expanding clinical reach while offsetting weaker areas such as bariatric surgery, U.S. deferrable procedures and China placements.

ISRG Builds on a Broad Robotic PlatformIntuitive Surgical’s platform spans da Vinci multi-port systems, the da Vinci SP single-port platform and Ion. Da Vinci supports robot-assisted soft tissue surgery across general surgery, urology, gynecology, cardiothoracic care and head and neck specialties.

Ion extends the company into minimally invasive lung biopsy through a flexible, robotic-assisted, catheter-based platform. ISRG is building a broader care ecosystem designed to widen procedure reach across specialties and settings.

Intuitive Surgical Gains From Recurring RevenueRecurring revenue is central to the model because instruments, accessories, leases and services rise with utilization and installed-base growth. In the second quarter of 2026, recurring revenue increased 19% to $2.47 billion.

That represented 85% of total revenue, making the business less dependent on one-time system sales. Instruments and accessories revenues rose 18% to $1.73 billion, while service revenues grew 21% to $472 million.

ISRG Procedure Growth Still Drives the StoryProcedure volume remains the key operating indicator. In the second quarter of 2026, total da Vinci and Ion procedures increased 16% year over year, including 15% da Vinci growth and 36% Ion growth.

International da Vinci procedures rose 20%, with Europe and Asia each up 20%. SP procedures increased 61%, while cardiac and nipple-sparing mastectomy procedures rose 39% and 43%, respectively. Management maintained its 2026 da Vinci procedure growth outlook of 13.5% to 15.5%, with expectations near the midpoint.

Intuitive Surgical Expands the Ecosystem With Digital ToolsSoftware and data are becoming more important to the Intuitive Surgical’s business model. The company began rolling out more than 100 planned da Vinci 5 updates focused on telepresence, simulation-based training and care-team workflow.

It also completed its first My Intuitive+ renewals, covering telepresence, simulation and artificial intelligence-driven case insights. No customer in the initial cohort opted out, suggesting these tools can deepen engagement and make the installed base more valuable.

What ISRG Investors Should Watch NextThe bottom line is that ISRG still has a clear platform-dependent growth scenario. Da Vinci 5 upgrades, Ion adoption, SP growth, recurring revenue and digital tools all support a wider ecosystem.

Risks remain visible. U.S. da Vinci procedure growth moderated to 12% in the second quarter from 14% in the first quarter, bariatric procedures declined at a high-single-digit rate and China remains pressured by lower tender activity, local competition and policy-driven pricing.

Medtronic plc (MDT - Free Report) and Johnson & Johnson (JNJ - Free Report) are relevant comparables for investors tracking surgical robotics and digitally enabled medical technology. Their presence keeps the competitive context important, even as ISRG maintains a competitive moat with high installed systems, improving utilization and procedure-linked revenue as well as strong clinical evidence.

Investors should pair this operating view with ISRG’s current Zacks Rank #2 (Buy) and Zacks Style Scores of B before forming a fuller stock view. The Zacks Rank is a short-term timeliness indicator, while the Style Scores help evaluate value, growth and momentum characteristics. Higher grades, especially A or B, are more favorable when considered alongside top-ranked stocks, but they should be weighed with procedure trends, placement dynamics and margin risks. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Intuitive Surgical (ISRG +1.08%), maker of the da Vinci robotic-assisted surgical systems, recently posted a strong quarter. But despite consistently solid numbers, the stock itself has been in a tailspin this year. As of Monday's close, it was down 38% thus far in 2026, and it's not just trading at a new 52-week low, but it's at a multi-year low as well; the last time it was at these levels was back in early 2024.

What's behind the stock's struggles this year, and could this be a glorious opportunity for long-term investors to buy the stock at a discount?

Image source: Getty Images.

Intuitive Surgical's growth has been looking much better of late Last week, Intuitive Surgical posted its second-quarter numbers, which yet again featured double-digit growth. Revenue of $2.9 billion for the period ending June 30 rose by 19% year over year. Over the past year, its growth rate has been comfortably above 15%. With hospitals resuming normal procedures and demand being higher, it's looking more like a top growth stock again.

ISRG Revenue (Quarterly YoY Growth) data by YCharts

The number of da Vinci procedures rose by 15%, and the install base for the surgical system also rose by 12%, totaling 11,710 as of the end of the period. It's an excellent sign that the business is growing well and with a higher install base, winning over new customers as well, setting itself up for even more growth ahead.

However, despite the solid numbers, the stock has been struggling this year. The company's Chief Financial Officer, Jamie Samath, noted that the expiration of the Affordable Care Act's enhanced premiums had a "modest adverse impact" on procedures during the quarter, which may help explain some of the market's apprehension. There's also been a decline in bariatric cases due to the rising popularity of GLP-1 weight loss drugs.

While the business has been doing well, these headwinds are preventing Intuitive from doing even better.

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Intuitive Surgical stock is currently trading at 33 times its estimated future earnings (based on analyst estimates), which is considerably lower than its past levels, as it wasn't uncommon for the multiple to be as high as around 70. Its elevated valuation may have also been a key reason for the stock's decline this year.

However, now with a lighter valuation, Intuitive's stock may be a great buy. The company has been posting strong numbers, and with plenty of growth opportunities still out there related to robotic-assisted surgery, this can be an excellent investment to buy and hold for the long haul.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley Fool recommends the following options: long January 2028 $520 calls on Intuitive Surgical and short January 2028 $530 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.

Live Coverage Updates appear automatically as they are published.

Live Updates Pinned 1 hour ago

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This live blog is being updated by Thomas Richmond, a 24/7 Wall St. contributor. You’ll get expert analysis of Intuitive Surgical’s Q2 earnings.

Simply stay on this page, and new updates will appear below automatically. We expect Intuitive Surgical to release earnings shortly after 4:00 p.m. ET.

1 minute ago

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That wraps up our initial coverage of Intuitive Surgical’s Q2 results. Thank you for stopping by!

22 minutes ago

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Intuitive Surgical (NASDAQ:ISRG | ISRG Price Prediction) is down 7.5% after Q2 earnings.

Does the Reaction Fit the Results? The company reported a strong beat: +11.83% on EPS, revenue up 18.54%, and non-GAAP gross margin expanding to 70.0% from 67.9%.

The gross margin guidance was raised to 68.0%–69.0%, directly refuting fears about the da Vinci 5 margin.

Historical Context Prior beats averaged a +3.48% day-of move, so today matches the pattern. Yet Q1 2026 popped +7.16% then faded -9.41% over 30 days.

What the Market Is Watching Procedure guidance was held at 13.5%–15.5%, not raised, which might be a concern that drove the sell-off.

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Demand for Intuitive Surgical’s newest robotic system remained strong, with da Vinci 5 placements increasing 37% year over year to 246.

Total da Vinci placements rose 18% to 468, helping systems revenue increase 19% to $685 million.

More than half of da Vinci placements used operating leases, including 131 usage-based systems. This structure could limit upfront systems revenue but expand recurring revenue as utilization grows.

Intuitive Surgical now has 11,710 da Vinci systems installed worldwide, up 12% from one year ago.

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Intuitive Surgical delivered a strong second quarter, with revenue increasing 19% to $2.89 billion and adjusted EPS climbing 28% to $2.80.

Both figures exceeded Wall Street’s expectations, although EPS included an $0.08 benefit from refunds of tariffs paid in prior periods.

Total procedures increased 16% year over year, including 15% growth for da Vinci procedures and 36% growth for Ion procedures.

Management continues to expect full-year da Vinci procedure growth of 13.5% to 15.5%, likely near the midpoint of that range.

41 minutes ago

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Intuitive Surgical just reported earnings, with shares initially down 7% following the report. Here are the key numbers:

Revenue: $2.89 billion vs. $2.83 billion expected Adjusted EPS: $2.80 vs. $2.50 expected Guidance:

Worldwide da Vinci procedure growth: 13.5% to 15.5% Non-GAAP gross margin: 68.0% to 69.0% Non-GAAP operating expense growth: 11% to 13% Quick Read:

Intuitive Surgical comfortably beat expectations, with revenue rising 18.4% and adjusted EPS climbing 27.9% year over year.

Despite the beat, shares are falling as investors focus on the procedure-growth outlook and whether future growth can justify the stock’s premium valuation.

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Bull Case Beat streak intact: Four consecutive EPS beats, capped by Q1’s $2.50 vs. $2.1068 earnings report. da Vinci 5 momentum: 232 placements in Q1 with 11% higher utilization than Xi. Recurring engine: Instruments & accessories revenue reached $1.69 billion, +23%, backed by $7.98 billion cash. Sentiment lean: Composite score 65.03 (Bullish); average analyst price target of $558.01 vs current share price of $401.96. Bear Case Post-beat fade: Average 30-day change of -2.28% after prior beats. Margin compression: 1.0% tariff drag; gross margin guide 67.5%-68.5%. Macro chill: Consumer sentiment at 44.8 threatens hospital capex. Valuation reset: P/E of 49 with the stock down 31.32% YTD. 1 hour ago

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The current full-year framework for Intuitive Surgical (NASDAQ:ISRG) calls for 13.5% to 15.5% da Vinci procedure growth and a 67.5% to 68.5% non-GAAP gross margin, embedding a 1.0% tariff drag.

Management historically guides conservatively, then walks the range up: 2025 started at 15.5%–17% and ended at 18%.

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Polymarket’s crowd assigns a 46.5% probability to Q2 procedure growth landing in the 15%–17.5% range, with 34.5% for a sub-15% result.

Bullish scenario: full-year procedure guide raised above 15.5%, margin biased toward 68%+, and softer tariff commentary.

Bearish scenario: unchanged procedure range, margin drift toward 67.5%, and hospital capex caution.

With four straight EPS beats averaging 18.66% most recently, the headline number matters less than the raise.

1 hour ago

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With Intuitive Surgical (NASDAQ:ISRG) set to report Q2 earnings tonight shortly after 4:00 PM ET, here’s the framework for tonight’s call.

Top 5 Analyst Questions Does FY2026 da Vinci procedure guidance of 13.5%–15.5% get raised after crowd bets favor 15%–17.5% growth? Any read-through from HCA’s July 14 surgical volume warning? Is the 1.0% tariff drag holding? da Vinci 5 mix and ASP trajectory after 232 placements in Q1? Buyback pace after $1.1B repurchased in Q1? Key Topics and Buzzwords Listen for: “quintuple aim,” “installed base leverage,” “usage-based leasing,” “capital constrained customers,” force feedback EU approval. Ion sustainability after 39% Q1 procedure growth; direct sales transition in Italy, Spain, Portugal. Red Flags Procedure miss versus guide, tariff drag expansion, gross margin cut below 67.5%, Hugo/Ottava share commentary, or hospital capex softness. 2 hours ago

Live

Intuitive Surgical’s (NASDAQ: ISRG) second-quarter report tonight will test whether the company can defend its premium valuation as procedure growth slows and tariffs pressure margins.

The biggest number to watch is procedure growth. After expanding 18% in 2025, management currently expects growth of 13.5% to 15.5% in fiscal 2026.

Investors will also be watching the mix of da Vinci 5 placements and utilization gains, which could determine the strength of the systems revenue narrative heading into the second half.

Management has estimated that tariffs will result in a drag equal to approximately 1% of revenue due to exposure across Mexico, Germany, and China. Any additional pressure could weigh on gross margins.

Shares have declined 21.92% over the past year. A guidance increase tonight could reinvigorate the growth-at-a-reasonable-price case, but a reduction in margin estimates would likely cement the stock’s ongoing derating.

Intuitive Surgical (NASDAQ:ISRG) reports Q2 earnings results at 4:40 PM ET tonight after the bell. The robotic surgery leader enters the earnings report tonight with a $142.05 billion market cap, while shares are down 29.3% year to date.

Momentum Meets a Valuation Reset Q1 delivered a fourth straight beat, with non-GAAP EPS of $2.50 topping the $2.11 consensus and revenue of $2.77 billion growing 23% year over year. Yet the stock has fallen 13.81% since that April 21 filing.

Q1 gross margin expanded to 67.8% from 66.4%, with da Vinci procedures up 16% and Ion procedures up 39%. Management nudged FY26 procedure growth to 13.5%-15.5%, still a step down from 2025.

The stock trades at about $400.55 as of 2:40 PM ET, against an average analyst price target of $558.01.

Consensus and Crowd Estimates Metric Value Frame FY26 da Vinci procedure growth 13.5%-15.5% Guidance FY26 non-GAAP gross margin 67.5%-68.5% Guidance Q2 procedure growth (crowd) 15%-17.5% at 36.5% Polymarket Forward P/E 39 Valuation Polymarket traders assign a 63% combined probability to Q2 procedure growth landing between 12.5% and 17.5%, and only 8% odds to a sub-12.5% miss. The setup skews toward in-range execution rather than a blowout.

Margins, Tariffs, and da Vinci 5 Take Center Stage Tonight, I’ll be watching ISRG’s gross margin closely. CFO Jamie Samath flagged that oil and memory input costs will hit harder later in the year, saying “we do expect those to have a greater unfavorable impact in the remainder of the year.” Any drift above the 1.0% of revenue tariff assumption would compress the margin story.

Investors will also focus on da Vinci 5 placement mix. Q1 delivered 232 da Vinci 5 systems out of 431 total placements, with da Vinci 5 utilization running 11% above Xi. That mix drives ASPs and downstream I&A revenue.

International tone matters too. Rosa cited “ongoing challenges in China and Japan,” with new Japanese reimbursements for 7 procedures beginning June 2026. I’ll track whether early June signal reads bullish. Ion momentum, SP procedure growth of 68%, and Force Feedback rollout round out the watchlist.

Earnings History Quarter EPS Surprise 1-Day Move 1-Week Move 30-Day Move Q1 2026 +18.66% -0.99% -6.16% -9.41% Q4 2025 +11.51% +0.92% -3.77% -3.40% Q3 2025 +20.65% +4.61% +2.00% +6.56% Q2 2025 +13.22% -2.66% -0.29% -5.14% On average, shares moved -0.50% one week after earnings across the past year.

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Contact [email protected] for any questions or corrections.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Intuitive Surgical (ISRG +0.51%) is scheduled to report earnings after the market closes on July 16. The robotic healthcare stock has suffered so far this year, falling a little more than 30%, despite a strong first-quarter earnings report.

Positioning a trade or an investment right before an earnings report always carries a bit of event risk, but the current setup for Intuitive Surgical presents a compelling bull case.

It's worth noting that the stock has a recent history of earnings beats, bettering analysts' predictions in each of the past four quarters. If Intuitive reports better earnings than the current predictions of $2.81 billion in revenue and $2.48 in earnings per share (EPS), the stock will likely go up. However, it's important to take a longer view of the company's potential if you're planning on investing.

Here are three reasons why Intuitive Surgical's stock is a good long-term buy:

Image source: Getty Images.

The price is right, for now While Intuitive historically commands a premium multiple due to its absolute dominance in robotic surgery, the stock's sell-off this year has driven its forward price-to-earnings (P/E) multiple down to around 36x. That's a stark discount to its 5-year historical average of more than 58 times forward P/E. This compression offers a much more attractive entry point into a company where more than 80% of revenue is highly durable and recurring, from instruments, accessories, and services.

In the first quarter, recurring revenue from instruments and services grew 23% year over year to $2.12 billion. The increase in instruments and accessories revenue was primarily driven by approximately 16% growth in da Vinci procedure volume, customer buying patterns, and approximately 39% growth in Ion procedure volume.

Once a hospital installs a machine, it is effectively locked into the Intuitive ecosystem, creating a powerful, reliable revenue stream for investors.

It's worth noting that in the first quarter, revenue and EPS both grew by double-digit percentages, with revenue reported as $2.77 billion, up 23% year over year, and EPS of $2.28, up nearly 19% over the same period a year ago.

One reason for pessimism among investors is that GLP-1 obesity drugs are lowering bariatric surgical volumes. However, Intuitive is making up for that with the growth in other medical procedures performed using its systems. The other concern is that the company is now promoting a longer lifespan for its instruments to lower hospital costs, but while that may cut down on revenue from instruments and accessories, it also builds customer loyalty and improves the company's moat.

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Its da Vinci 5 system is seeing a nice uptake The central near-term driver for Intuitive is the rollout of its next-generation da Vinci 5 system. Early data show that hospital utilization of the da Vinci 5 is roughly 11% higher than the legacy Xi platform. Because customer adoption has moved faster than expected, the accelerating trade-in and upgrade cycle serves as a major fundamental catalyst that could drive an upside surprise in system placements and forward guidance.

The first quarter 2026 da Vinci surgical system placements included 232 da Vinci 5 systems, compared with 147 in the first quarter of 2025.

The launch of the da Vinci 5 platform introduces true hardware-enabled artificial intelligence and Force Feedback technology, which provide surgeons with a physical sense of resistance and tissue pressure for the first time. Beyond just a near-term upgrade cycle, this establishes the technology baseline for the next decade of surgery. It also creates a massive technical barrier that newer competitors will find difficult to replicate.

Expansion into diagnostics and soft tissue treatment For years, the company focused strictly on treating disease through general surgery with the da Vinci platform. With its Ion platform, it is moving upstream to own the diagnosis and early intervention stage as well.

The spearhead of this diagnostic expansion is the Ion endoluminal system, a robotic bronchoscopy platform designed for minimally invasive lung biopsies. Ion uses an ultrathin, highly flexible robotic catheter.

Ion feeds Intuitive's high-margin recurring revenue model. Each procedure requires single-use flexible needles, vision probes, and patient-specific 3D planning software. Furthermore, Intuitive is currently integrating adjunctive diagnostic technologies such as endobronchial ultrasound (EBUS) directly into the Ion workflow to increase revenue per procedure.

Intuitive is also deepening its moat in soft tissue treatment through its da Vinci SP (Single Port) platform. While the da Vinci 5 requires multiple small incisions across the abdomen, the SP platform allows an entire surgical team of camera and instruments to enter through one single 2.5-centimeter incision or a natural orifice. The SP platform is rapidly gaining traction in urology and transoral otolaryngology (head and neck surgeries), driving high-volume procedure growth.

So Intuitive Surgical looks undervalued heading into the Q2 report. For those with a multi-year horizon, the setup looks favorable.

Key Takeaways ISRG expands its robotic ecosystem with AI, digital tools and minimally invasive platforms. TER, CDNS, MCHP and FTV are advancing robotics through AI, automation and data center innovation.The picks are set to benefit from rising robotics adoption despite industry dynamics and regulatory risks. Robotics companies are at the forefront of innovation, driving efficiency and productivity across industries such as manufacturing, healthcare and logistics. The global robotics market is poised for significant growth, fueled by technological breakthroughs, and rising demand for automation and advancements in artificial intelligence (AI) and machine learning. 

This potential for high growth promises substantial returns to investors. Also, robotics can address labor shortages and enhance precision in tasks, thereby reducing operational costs and improving quality. This space includes companies that integrate hardware, software and AI to build intelligent machines capable of performing complex tasks autonomously or semi-autonomously.

Pros and Cons of Robotics ApplicationDespite the rapid growth and transformative potential of this space, the investment landscape is not without risks. Robotics technology is still evolving, and companies in this space often face high research and development costs with no guaranteed success. Regulatory challenges, market volatility, concerns about job displacement and data privacy, along with the societal impact of automation add to the uncertainty. 

At this stage, we recommend five robotics stocks for investment in second-half 2026. These are: Intuitive Surgical Inc. (ISRG - Free Report) , Teradyne Inc. (TER - Free Report) , Cadence Design Systems Inc. (CDNS - Free Report) , Microchip Technology Inc. (MCHP - Free Report) and Fortive Corp. (FTV - Free Report) . Each of our picks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

The chart below shows the price performance of our five picks in the past three months.

Image Source: Zacks Investment Research

Intuitive Surgical Inc.Intuitive Surgical is increasingly embedding AI and digital tools into its robotic ecosystem. ISRG operates in the robotic surgery market for soft tissue procedures, where adoption is supported by the shift toward minimally invasive care. The company’s platforms include the da Vinci surgical system and the Ion endoluminal system.

ISRG continues to add digital capabilities that can improve training, workflow and program management for hospitals. These efforts include software and analytics that connect systems, instruments and services and can deepen customer engagement over time.

In the first quarter of 2026, ISRG highlighted expanded adoption of its da Vinci, Ion and digital platforms, which support continued investment in the connected ecosystem. Over time, digital features can differentiate the installed base and support incremental service and software revenues as hospitals focus on standardizing surgical programs.

Intuitive Surgical has an expected revenue and earnings growth rate of 16.5% and 16.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.1% over the last 30 days. 

Teradyne Inc.Teradyne benefits from strong AI-related demand that is driving significant investments in cloud AI build-out as customers accelerate the production of a wide range of AI accelerators, networking, memory, and power devices. AI computing is witnessing technological progress, which is bringing rapid transformation to design, process, and packaging technologies. 

Robotics delivered $91 million of first-quarter 2026 revenues, up 32% year over year, and management highlighted a fourth consecutive quarter of sequential growth. The company cited customer engagement across e-commerce, electronics manufacturing, and semiconductor end markets, and noted that AI-related revenues in Robotics increased to 15% of quarterly sales with emerging data center applications. 

TER continues to expect its large e-commerce customer to triple its revenue contribution in 2026 versus 2025, which, if executed, would improve scale and utilization in the Robotics segment. Over time, the use of robots in assisted assembly, test and data center operations could broaden the installed base beyond traditional factory automation deployments.

Teradyne has an expected revenue and earnings growth rate of 42.1% and 81.8%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 1.6% over the last 30 days. 

Cadence Design Systems Inc.Cadence Design Systems is benefiting from higher design complexity and rising customer spend on AI-driven automation. CDNS’ efforts to unify EDA, IP, 3D-IC, PCB and system analysis are aiding in capitalizing on the opportunity presented by the AI super cycle. The focus on generative AI, agentic AI and physical AI is leading to an exponential increase in computing demand and semiconductor innovation.

Amid rapid AI proliferation, the Cadence.ai portfolio has been gaining strength and new product launches (like AgentStack along with ChipStack, ViraStack and InnoStack AI Super Agents) are expected to aid in sustaining the momentum. 

CDNS’ hardware systems continue to gain traction from AI, HPC, robotics and automotive companies. The inorganic strategy is the calculated execution of its Intelligent System Design vision. Backlog stood at $8 billion. CDNS now expects 2026 revenues to be between $6.125-$6.225 billion compared with $5.3 billion in 2025.

Cadence Design Systems has an expected revenue and earnings growth rate of 17.1% and 11.2%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has remained the same over the last 30 days. 

Microchip Technology Inc.Microchip Technology benefits from growing AI investments. The company’s Gen 4 and Gen 5 data center products are witnessing strong sales growth. MCHP’s new products are expected to gain traction with the launch of the industry's first 3-nanometer-based PCIe Gen 6 switch that powers modern AI infrastructure. 

These switches offer double bandwidth, lower latency, advanced security and high-density AI connectivity for next-generation cloud and data center performance. The success of the restructuring plan also bodes well for MCHP’s prospects. The company also entered the PCIe retimer market in the June 2026 quarter as a companion device for Gen6 switches, and disclosed an OEM design win that displaced a competitor. 

MCHP has expanded connectivity, storage and compute offerings for AI and data center applications, as well as intelligent power modules for AI at the edge. These factors are expected to drive top-line growth in the long term.

Microchip Technology has an expected revenue and earnings growth rate of 31.7% and 88.4%, respectively, for the current year (ending March 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 0.3% in the last 30 days.

Fortive Corp.Fortive has been benefiting from productivity actions and reinvestment in innovation and commercial initiatives. FTV is benefiting from steady demand across Intelligent Operating Solutions and Advanced Healthcare Solutions. The company’s Fortive Accelerated strategy bodes well.

FTV is building the new Fortive around faster, profitable organic growth, disciplined capital allocation and consistent delivery. In first-quarter 2026, the company cited higher innovation velocity with several hardware milestones and AI-enhanced launches. 

In healthcare, FTV’s Provation Mira Documentation Assist was introduced as a real-time, AI-powered, voice-driven documentation capability embedded into GI procedural workflows, which can reduce administrative burden and support continued software adoption. 

FTV’s commercial efforts are increasingly targeted at higher-growth verticals such as AI data centers, defense and distributed energy, alongside made-in-region actions in India and China and a European launch of STERRAD ULTRA GI.

Fortive has an expected revenue and earnings growth rate of -6.9% and 9.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.3% in the last 30 days.

Key Takeaways Intuitive Surgical reports Q2 results on July 16, with sales seen up 15% and EPS up 13.2% year over year.ISRG faces margin pressure from da Vinci 5 rollout, tariffs and higher input costs despite strong growth.ISRG's recurring revenues, procedure growth and da Vinci 5 adoption support its long-term outlook. Intuitive Surgical (ISRG - Free Report) is set to release second-quarter results on July 16. The Zacks Consensus Estimate for sales is pegged at $2.81 billion, indicating year-over-year growth of 15%, and the same for earnings per share (EPS) implies an improvement of 13.2% to $2.48. The estimate for EPS has remained stable over the past seven days.

In the last reported quarter, Intuitive Surgical delivered an earnings surprise of 20.19%. The company’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.82%.

Although ISRG’s top and bottom-line figures are likely to reflect strong growth during the second quarter, its shares have underperformed the Zacks Medical - Instrument industry as well as other robotic-surgery device makers — Stryker (SYK - Free Report) , Zimmer Biomet (ZBH - Free Report) , Globus Medical (GMED - Free Report) and Stereotaxis (STXS - Free Report) — so far this year. The stock has declined 27.4%, its industry has dipped 14.2%, and the S&P 500 Index has gained 9.5% in the same period. The share prices of SYK, ZBH, GMED and STXS have decreased 6.9%, 0.8%, 12.2% and 24.4%, respectively.

YTD Price Performance

Image Source: Zacks Investment Research

While Stryker commercializes its Mako robotic system for orthopedic joint replacements, Zimmer Biomet has ROSA system, which is available for orthopedic and neurosurgical procedures. Globus Medical and Stereotaxis’ robotic portfolios include ExcelsiusGPS and Genesis systems, respectively, used for spine and cranial procedures, and endovascular interventions.

The underperformance of the ISRG stock has led to a decline in its valuation multiples as well. The Price-to-Earnings Forward 12 Month (P/E F12M) valuation has fallen from a high of 96.05X at the beginning of 2025 to its current 37.12X, reflecting a significant decline despite robust earnings growth. At its current valuation multiples, the ISRG stock looks attractive amid its strong fundamentals.

P/E F12M Valuation of ISRG vs Industry

Image Source: Zacks Investment Research

Why Investors Are Selling ISRG StockDespite consistently delivering double-digit revenue and earnings growth, Intuitive Surgical stock has remained under pressure this year as investors weigh near-term margin headwinds against its long-term growth story. The biggest concern stems from the ongoing rollout of the next-generation da Vinci 5 platform.

Although customer adoption has exceeded expectations, the system currently carries lower margins than the mature Xi platform due to higher manufacturing, service and support costs. The company also expects elevated trade-in activity as hospitals replace older systems with da Vinci 5, creating an additional drag on profitability. Management further expects faster growth of newer da Vinci 5 and Ion platforms, along with higher depreciation from recent manufacturing expansions, to keep gross margins under pressure in 2026.

Tariffs, higher freight expenses and rising semiconductor memory costs are expected to increase input costs through the remainder of the year, while management continues to monitor potential supply constraints across components. Internationally, China remains a difficult market due to lower tender activity, domestic competition and pricing pressure, while Japan continues to face slower capital placements despite supportive reimbursement initiatives.

Investors are also watching the impact of GLP-1 obesity drugs, which continue to reduce bariatric procedure volumes. Although none of these challenges materially alter Intuitive Surgical’s long-term outlook, they have contributed to weaker investor sentiment and multiple compression in recent months. The entry of both large and smaller players, including Stryker, Zimmer Biomet, Globus Medical and Stereotaxis, into the robotic surgery market could intensify competition over time and erode ISRG's market share.

The Bull Case: What Drives ISRG's Prospect?While short-term concerns have weighed on the stock, Intuitive Surgical's underlying business remains exceptionally strong. The company continues to generate robust financial performance, reporting 23% revenue growth and a 36% increase in adjusted earnings during the first quarter of 2026, supported by 17% overall procedure growth across its da Vinci and Ion platforms.

Recurring revenues accounted for 86% of total sales, highlighting the resilience of its business model. Higher utilization of installed systems continues to drive high-margin instruments, accessories and service revenues, creating a recurring revenue stream that becomes increasingly valuable as the installed base expands. U.S. da Vinci utilization increased 4% during the first quarter, while utilization of da Vinci 5 systems remains approximately 11% higher than the legacy Xi platform.

The da Vinci 5 upgrade cycle is likely to remain Intuitive Surgical's biggest growth catalyst over the next several quarters. Customer adoption has been stronger than expected, with nearly 1,500 da Vinci 5 systems installed and approximately 13,000 surgeons already using the platform. Hospitals continue to upgrade their older systems, reflected by a sharp increase in trade-ins.

da Vinci Market Opportunity

Image Source: Intuitive Surgical

New Force Feedback instruments, additional FDA clearances and ongoing software enhancements are expected to improve clinical outcomes and further accelerate adoption. Intuitive Surgical continues to invest heavily in AI-enabled capabilities through its digital ecosystem. The company is leveraging surgical video, robotic data, force-feedback information and electronic medical records to develop AI-powered anatomy identification, decision support, workflow optimization and, eventually, augmented dexterity and automation.

Combined with rapid growth in the Ion lung biopsy platform, expanding SP procedures, rising international adoption and a growing installed base, these innovations provide multiple long-term growth drivers that reinforce Intuitive Surgical's leadership in robotic-assisted surgery.

Earnings Beat LikelyOur proven model predicts an earnings beat for ISRG this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($2.55) and the Zacks Consensus Estimate ($2.48), is +2.78%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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ConclusionAlthough near-term margin pressure from the da Vinci 5 rollout, tariffs and higher input costs has weighed on investor sentiment, Intuitive Surgical's long-term investment thesis remains intact. The company continues to deliver industry-leading procedure growth, expanding recurring revenues, increasing system utilization, and driving strong adoption of its newest robotic platforms while building a differentiated AI-enabled surgical ecosystem.

ISRG Short-Term Price Target

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With consistent strong execution and valuation multiples that have compressed significantly from its 2025 peak to around 37.1X despite healthy earnings growth, ISRG's valuation appears considerably more attractive than it was earlier this year. For long-term investors seeking exposure to robotic surgery, the recent pullback presents an opportunity to accumulate shares of a company with durable competitive advantages and robust growth fundamentals. Moreover, an expected earnings beat in the second quarter, along with its favorable rank, makes it an attractive bet before its second-quarter earnings release.

A 28% drop in Intuitive Surgical (ISRG +5.72%) stock this year has left investors anxious, but an analyst from Goldman Sachs argues the panic regarding the medical device maker is rooted in a misunderstanding of two major changes to Intuitive's instrument lifetimes.

Several analysts downgraded their positions in Intuitive after its first-quarter earnings, including those with Deutsche Bank, Bank of America, JPMorgan Chase, and HSBC. David Roman of Goldman Sachs, on the other hand, upped the stock's price target to $558.

Here is what changed, why the market reacted defensively, and what matters next.

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The instrument changes: What they mean Intuitive recently adjusted the number of times that hospitals can reuse its surgical tools. While investors feared this would kill recurring revenue, the reality is more nuanced.

In the first change, Intuitive increased the lifespan of five out of its six force-feedback tools (which allow surgeons to feel the push and pull used on tissues during surgery) from six uses to 15 uses. This change has zero impact on revenue per procedure. It was simply done to ease supply chain bottlenecks, allowing more hospitals to adopt these high-demand healthcare tools. In addition, the company sees the move as likely to increase adoption of force-feedback instrumentation.

The second change could have a small impact on revenue, as Intuitive plans to increase the maximum number of uses of older, standard instruments to lower hospitals' costs. This change will chip away at instruments and accessories revenue, the money that Intuitive collects each time a tool is used, but it also builds customer loyalty. In the first quarter, the segment grew 23% year over year to $1.69 billion.

Overall revenue also grew by 23%, to $2.77 billion, while earnings per share were $2.28, up 18.7% over the same period last year.

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Why Goldman thinks investors are needlessly panicking Some investors viewed these extensions as a panicked defensive swipe meant to undercut companies such as Restore Robotics that refurbish and resell used da Vinci parts. However, it's an established pattern, not a panic move. Intuitive started extending instrument life cycles well before third-party refurbishers were ever a market factor. Past data shows resilience.

When Intuitive launched its Extended Use Program in 2020, bumping tool lifespans from 10 uses to 12 to 18 uses, it modeled a 7% drop in revenue per procedure. The actual hit was just 2% before bouncing back to revenue growth.

Goldman expects history to repeat itself. Premium, higher-priced force-feedback tools and other advanced instruments will likely offset the lower margins of the cheaper, older core tools. As a result, the bank is maintaining its target, modeling a negligible 1% annual decline in U.S. revenue per procedure.

Key factors for investors to watch Intuitive's underlying business remains robust. Its instruments performed 847,000 procedures, a 16% year-over-year increase in the first quarter. Its da Vinci surgical system installed base grew 12% over the same period a year ago to 11,395 systems, and its Ion endoluminal systems installed base rose 22% year over year to 1,041 systems. The Ion endoluminal system is a robotic bronchoscopy platform that enables surgeons to navigate more precisely into the lungs for diagnostic and therapeutic procedures.

There are legitimate concerns about the stock. It commands a premium valuation of more than 49 times trailing earnings, leaving very little room for error. To hit Goldman's targets, the company will need to better explain the logistics of the 2027 instrument changes, calming the market's biggest worry. The company is also facing rising competition from the Hugo system from Medtronic and the Ottava robot from Johnson & Johnson.

Goldman's outlook suggests that patience will be rewarded over panic. However, the upcoming July earnings report remains the ultimate test of whether investor fears are justified.

Key Takeaways ISRG raised 2026 da Vinci procedure growth guidance to 13.5-15.5% after strong Q1 2026 results.Intuitive Surgical saw 31% U.S. general surgery growth and 19% international procedure growth.ISRG faces risks from GLP-1 pressure on bariatrics, China weakness, and healthcare spending concerns. Intuitive Surgical’s (ISRG - Free Report) raised its full-year outlook on the first-quarter earnings call, primarily supported by a broadly diversified procedure growth profile. The management increased its 2026 da Vinci procedure growth guidance to 13.5-15.5% from 13-15%, reflecting confidence in sustained adoption trends.

The biggest growth driver continues to be U.S. general surgery, where procedures such as cholecystectomies and appendectomies surged 31% year over year. Growth was supported by increased after-hours utilization and higher adoption of the da Vinci 5 platform, which delivers utilization rates roughly 11% higher than those of the earlier Xi system.

International markets are also becoming an increasingly important contributor, with ex-U.S. da Vinci procedures growing 19%, driven by strong momentum in Europe, India, Korea, Taiwan, and Canada. Overseas procedures now represent 38% of total da Vinci volume, highlighting the growing diversification of Intuitive Surgical’s revenue base and long-term expansion potential.

However, some headwinds could limit upside. In the United States, bariatric procedures declined approximately 10%, as rising adoption of GLP-1 obesity drugs continues to reduce surgical demand in weight-loss procedures.

Internationally, China remains challenged by weak tender activity, domestic competition, and pricing pressure, while Japan continues to face slower adoption following reduced system placements.

Management remains cautious about external risks, particularly the potential impact of ACA subsidy changes in the U.S. healthcare market and broader macroeconomic pressures affecting hospital capital spending in Europe and Asia. While procedure growth appears broad-based enough to support 2026 guidance, sustaining momentum will depend on whether strength in general surgery and international expansion can offset these emerging structural headwinds.

Peer UpdatesBoston Scientific (BSX - Free Report) delivered solid procedural momentum in the first quarter of 2026, supported by strength across electrophysiology, cardiovascular, and neuromodulation franchises. The standout performer was electrophysiology, where sales surged 22% organically, driven by strong adoption of the FARAPULSE pulsed field ablation platform, expanded OPAL mapping utilization, and robust international demand, particularly in Europe.

Cardiovascular procedures also remained healthy, with WATCHMAN growing 19%. The interventional cardiology is benefiting from strong demand for AGENT DCB and imaging portfolio. However, procedural growth was partially offset by weakness in standalone WATCHMAN procedures due to hospital capacity constraints and softer Urology volumes, highlighting pockets of demand normalization despite innovation-led strength.

Medtronic’s (MDT - Free Report) results in the fourth quarter of fiscal 2026 reflected broad-based procedural strength, led by exceptional performance in high-growth cardiovascular technologies. Cardiac Ablation Solutions grew 78% globally, with Pulsed Field Ablation procedures surging 145%, driven by rapid adoption of the Affera platform and Sphere-9 catheter. The expanding installed base, rising 40% sequentially in the United States, also aided growth.

Surgical procedures gained momentum as Hugo robotic-assisted surgery system volumes grew 2x–3x faster than the market, supported by rising utilization and expanding U.S. placements. Additional procedural tailwinds came from the Symplicity renal denervation platform, where weekly procedure volumes doubled, reinforcing Medtronic’s innovation-driven growth trajectory and supporting an increasingly favorable procedure growth outlook heading into fiscal 2027.

ISRG’s Price Performance, Valuation and EstimatesShares of ISRG have lost 28.9% so far this year compared with an 18.2% decline of the industry.

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From a valuation standpoint, Intuitive Surgical trades at a forward price-to-earnings ratio of 36.55X, above the industry average. But, it is still lower than its five-year median of 70.02X. ISRG carries a Value Score of D.

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The Zacks Consensus Estimate for Intuitive Surgical’s 2026 earnings implies a 16.6% rise from the year-ago period’s level.

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The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.