Intuitive Surgical, Inc. (ISRG): A Bull Case Theory

We came across a bullish thesis on Intuitive Surgical, Inc. on Uncle Stock Notes’s Substack. In this article, we will summarize the bulls’ thesis on ISRG. Intuitive Surgical, Inc.'s share was trading at $522.04 as of January 28th. ISRG’s trailing and forward P/E were 66.33 and 53.76 respectively according to Yahoo Finance.

Intuitive Surgical, Inc. develops, manufactures, and markets products that enable physicians and healthcare providers to enhance the quality of and access to minimally invasive care in the United States and internationally. ISRG’s Q3 2025 results signal a decisive return to a new innovation-driven growth cycle, led by the successful launch of its flagship da Vinci 5 system and accelerating procedure volumes across its platforms.

The company installed 427 da Vinci systems during the quarter, including 240 da Vinci 5 units, marking the start of a large-scale upgrade and replacement cycle that strengthens long-term system revenue visibility.

This momentum is reinforced by robust surgical volume growth, with global procedures rising 20% year over year, da Vinci procedures up 19%, and Ion lung biopsy procedures surging 52%, underscoring the expanding clinical adoption of robotic surgery beyond traditional specialties. As each procedure drives recurring demand for instruments and accessories—now over 60% of total revenue—this growth translates directly into durable, high-margin cash flows.

Financial performance was equally strong, with revenue rising 23% to $2.51 billion and non-GAAP EPS climbing 30% to $2.40, comfortably exceeding expectations. Despite modest gross margin pressure from tariffs and early da Vinci 5 manufacturing costs, operating margins remained near 39%, highlighting the scalability of the model.

Management reinforced confidence through a $1.92 billion share repurchase, reflecting both balance sheet strength and belief in long-term value creation. Strategically, Intuitive continues to deepen its moat by building an integrated ecosystem of hardware, software, data, and services, positioning itself as a long-term partner to hospitals rather than a standalone equipment vendor.

With raised earnings expectations, a premium valuation supported by strong growth visibility, and multiple years of system and procedure expansion ahead, Intuitive Surgical appears well positioned for sustained compounding. While risks remain around hospital capital spending and rising competition, the combination of technological leadership, recurring revenue, and a growing installed base marks the beginning of another golden growth phase for long-term investors.

Previously, we covered a bullish thesis on Intuitive Surgical, Inc. (ISRG) by Kontra Investment Xchange in December 2024, which highlighted its leadership in robotic surgery, rising procedure volumes, and long-term adoption potential. ISRG’s stock price has appreciated by approximately 3.68% since our coverage due to stronger-than-expected procedural growth. Uncle Stock Notes shares a similar view but emphasizes on the da Vinci 5 launch and accelerating system upgrade cycle.

Intuitive Surgical, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 99 hedge fund portfolios held ISRG at the end of the third quarter which was 107 in the previous quarter. While we acknowledge the risk and potential of ISRG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ISRG and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.