Is Intuitive Surgical the Hidden Winner in Healthcare's Weakness?

The medical sector in the United States has been heavily affected by a bearish cycle, driven by scandals surrounding the GLP-1 drugs used in weight loss solutions for consumers. As more companies are exposed to the manufacturing and distribution of these drugs, even some unrelated names have been dragged down by this broader sentiment, creating massive opportunities for those who are bold enough to look into the space.

With the Health Care Select Sector SPDR Fund (NYSEARCA: XLV) now trading at price-to-earnings (P/E) ratios well into the lower end of the ten-year spectrum, some companies could represent a massive opportunity in terms of closing down these undervaluation gaps in the coming months, but only if the market realizes that these names aren’t inherently exposed to the weight loss volatility.

Intuitive Surgical Inc. (NASDAQ: ISRG) is a medical robotics company leading the next wave of surgical innovations in the United States. It is currently broadening its reach to other parts of the world.

As investors will discover, today’s price is only a shadow of where the company could be trading once the market acknowledges its recent growth trajectory and exposure to new revenue streams, all of which are completely detached from the weight loss industry and its bearish sentiment.

A Contrarian Bet That Pays Big

After a quarterly decline of 19.2%, Intuitive Surgical stock now trades at only 71% of its 52-week high, sending it into deep bear market territory. At face value, this price action likely scares away most investors, making them feel like they are chasing the falling knife.

However, at some point, action becomes necessary in these situations, and several sound reasons justify seizing this discounted opportunity. First and foremost, Intuitive Surgical is now expanding its flagship products overseas in a specific manner that should attract a higher valuation.

Its Da Vinci product line has pivoted into a usage-based lease program, where medical entities using this equipment will be charged based on how much (and often) they utilize the machine. While this creates less cash upfront for the company, it also locks in months of steady revenue streams, increasing the stability and predictability of the company’s financials.

That quality is often a requirement for many investors seeking to deploy capital in an area experiencing bearish volatility, such as the entire healthcare sector. Furthermore, recent expansions into Europe and Japan may position Intuitive Surgical for a potential earnings-per-share (EPS) beat in the coming quarters.

Since it is too early to determine how many orders will be generated from these new markets, Wall Street analysts must wait until the quarterly announcement is nearly here to update their ratings and price targets. One thing is for sure, though: the leasing model is set to boost margins as it requires less fulfillment and logistics cost.

More than just leasing, investing in technology and artificial intelligence to make this equipment more efficient is another tailwind for margins, making it all the more reason to expect a potential earnings beat and therefore a much higher stock price.

What Investors Can Expect Out of Intuitive Surgical Stock

The company’s 52-week high had been set at $616 per share, and some Wall Street analysts believe the stock could revisit that level before the end of the year. While the consensus price target remains $595.95 per share, Royal Bank of Canada analyst Shagun Singh forecasts the stock to reach $615 instead.

Representing 40% in upside potential from today’s price, this call is certainly a bold one considering how bearish the stock has behaved recently. However, when investors consider all the growth factors driving Intuitive Surgical, this call may be conservative.

In fact, the recent quarterly earnings announcement may serve as a foreshadowing of more to come, as the company reported $2.19 in EPS, which is 13.5% above the MarketBeat consensus of $1.93 only. This shows investors that maybe the markets have been lowering their expectations based on the broader negative sentiment that is now taking over the sector. It is an excellent opportunity to profit if these expectations are proven wrong (as they are today).

In response to the approaching bullish storm, Corient Private Wealth increased its Intuitive Surgical stock holdings in September 2025 by 68.8%, bringing its entire position to a high of $165 million today. Taking this as a vote of confidence, investors can now start to assume that a better future could be had in shares of Intuitive Surgical, born off its deep discount today.

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The article "Is Intuitive Surgical the Hidden Winner in Healthcare’s Weakness?" first appeared on MarketBeat.