Intuitive Surgical, Inc. (ISRG): Among the Best Stocks to Buy During Recession

We recently compiled a list of the 15 Best Stocks to Buy During Recession. In this article, we are going to take a look at where Intuitive Surgical, Inc. (NASDAQ:ISRG) stands against the other stocks.

As per BlackRock, 2025 started with a bumpy ride for the US stocks. That being said, the asset manager believes that the sentiment has been a critical driver, but fundamentals seem to be healthy. This makes up for an optimistic longer-run outlook. Despite the tariff shocks creating difficult markets, the firm is constructive in its outlook and opines that volatility is an opportunity to capitalize on stock dispersion. Furthermore, Asia continues to exhibit a diversification opportunity for making investments in the AI theme, with equities providing low correlation to US counterparts.

Amidst Worries, There Is a Silver Lining

The trade and tariff uncertainty, which fueled the early-year volatility, advanced at the beginning of Q2 due to the US tariff pronouncements, according to the investment management company. This resulted in a global market meltdown and revived fears related to recession. However, as the quarter progressed, the tariff tensions took a backseat, and there was some optimism visible in the broader US markets. The asset manager believes that, while tariffs remain a critical measure, the potential for market-supporting policies like deregulation and corporate tax cuts provides some room for emergent optimism.

The firm highlighted the importance of an active approach in a bid to capitalize on inefficiencies and to make precise and intentional decisions amidst historic change and transition. While the results of bilateral tariff negotiations remain unpredictable, having a pulse on company dynamics, mainly when the macro picture remains unclear, can act as a differentiator for portfolios.

Policy Measures Likely to Support Moving Forward

The firm opines that corporate strength has supported the US equities’ momentum, and it comes through in earnings and market share. As per the firm, relatively pro-industry policies have stimulated healthy FCF. Several companies throughout different time frames have deployed the cash for future business growth. Even though the policy uncertainty in the current time of transition led to the pause in large investment decisions, the company believes that moves toward deregulation and the reshoring of supply chains once policy gets settled can result in the revival of CapEx spending throughout industries, such as technology and industrials. Despite tariffs dominating, the asset manager expects that deregulation and other policy priorities can regain attention. The high drive for innovation is the long-term secular trend that can support the US equities.

Our Methodology

To list the 15 Best Stocks to Buy During Recession, we considered the stocks from recession-proof industries such as utilities, consumer defensive, and healthcare. After getting an extensive list of 25-30 stocks, we chose the ones popular among hedge funds. Finally, the stocks were arranged in ascending order of their hedge fund sentiments, as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Intuitive Surgical, Inc. (NASDAQ:ISRG)

Number of Hedge Fund Holders: 95

Intuitive Surgical, Inc. (NASDAQ:ISRG) develops, produces, and markets a robotic system for assisting minimally invasive surgery. Morgan Stanley opines that the company’s Q1 2025 report and detailed commentary on tariffs exhibit a clearing event for the stock, and the firm sees a healthy entry point to one of the best business models in MedTech. As per the firm, outside of tariffs, Intuitive Surgical, Inc. (NASDAQ:ISRG)’s base business remains in a strong place. Elsewhere, William Blair analyst Brandon Vazquez maintained the bullish stance on the company’s stock. This analyst’s rating was backed by a combination of factors demonstrating the company’s strong performance and growth potential.

As per the analyst, Intuitive Surgical, Inc. (NASDAQ:ISRG)’s Q1 2025 results surpassed expectations thanks to impressive global and international procedure growth rates, which demonstrate strong demand for the company’s offerings. Furthermore, the analyst opines that, despite macroeconomic challenges, Intuitive Surgical, Inc. (NASDAQ:ISRG) has demonstrated resilience. Its strategic initiatives, which include the operating lease strategy, continue to help mitigate the risks, says Vazquez. In Q1 2025, revenue came in at $2.25 billion, reflecting an increase of 19% as compared with $1.89 billion in Q1 2024. The increased revenue was aided by higher growth in da Vinci procedure volume, higher da Vinci system placements, and a rise in the installed base of systems.

Baron Funds, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“Apart from cash, stock selection was positive overall due to solid gains from a handful of holdings in health care equipment, biotechnology, life sciences tools & services, and health care services. Stock selection in health care equipment was an 80-plus basis point tailwind to performance owing to modest gains from the Fund’s large positions in global medical device manufacturer Boston Scientific Corporation and robotic surgical system leader Intuitive Surgical, Inc. (NASDAQ:ISRG). Intuitive’s quarterly revenue and earnings surpassed Street expectations due to strong systems placements and procedure growth. The company remains in the early stages of a new product cycle with its new da Vinci 5 system, and we continue to believe the company has a long runway for growth driven by continued adoption and expansion of robotic surgery.”

Overall ISRG ranks 6th on our list of the best stocks to buy during recession. While we acknowledge the potential of ISRG as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than ISRG but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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