Intuitive Surgical (ISRG) Fell Due to Investor Concerns

Baron Funds, an investment management company, released its “Baron Health Care Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund rose 5.39% (Institutional Shares) in the quarter, compared to a 5.05% gain for the Russell 3000 Health Care Index (benchmark) and an 8.18% gain for the Russell 3000 Index (the Index). The Fund performed similarly to the Benchmark this quarter. Solid stock selection was primarily offset by negative effects from active sub-industry allocations and cash holdings during a rising market. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Baron Health Care Fund highlighted stocks such as Intuitive Surgical, Inc. (NASDAQ:ISRG). Intuitive Surgical, Inc. (NASDAQ:ISRG) manufactures and markets products that help physicians and healthcare providers improve the quality of and access to minimally invasive care. The one-month return of Intuitive Surgical, Inc. (NASDAQ:ISRG) was 23.42%, and its shares gained 5.64% of their value over the last 52 weeks. On November 3, 2025, Intuitive Surgical, Inc. (NASDAQ:ISRG) stock closed at $544.21 per share, with a market capitalization of $192.92 billion.

Baron Health Care Fund stated the following regarding Intuitive Surgical, Inc. (NASDAQ:ISRG) in its third quarter 2025 investor letter:

"Intuitive Surgical, Inc. (NASDAQ:ISRG) manufactures the da Vinci Surgical System, a robotic surgical system used for minimally invasive surgical procedures. The stock detracted from performance amid investor concerns about financial pressure on hospital customers following Medicaid cuts included in the One Big Beautiful Bill Act. Additional concerns emerged regarding the potential use of third party reprocessed instruments with Intuitive’s robotic systems. We believe hospitals are likely to be cautious about adopting reprocessed instruments given potential quality, reliability, and liability risks. Looking ahead, we see a long runway for growth as adoption of Intuitive’s robotic systems continues to expand across a growing range of surgical procedures."

Intuitive Surgical, Inc. (NASDAQ:ISRG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 107 hedge fund portfolios held Intuitive Surgical, Inc. (NASDAQ:ISRG) at the end of the second quarter, up from 106 in the previous quarter.  In the third quarter of 2025, Intuitive Surgical, Inc.'s (NASDAQ:ISRG) revenue grew 23% to $2.5 billion. While we acknowledge the potential of Intuitive Surgical, Inc. (NASDAQ:ISRG) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Intuitive Surgical, Inc. (NASDAQ:ISRG) and shared the list of stocks Jim Cramer discussed recently. Intuitive Surgical, Inc. (NASDAQ:ISRG) contributed to Baron Health Care Fund's performance in the previous quarter by posting robust financial results. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.