Franklin Street Advisors Sells $23 Million Intuitive Surgical Stake as Tariff Risks Weigh on Margins
Key Points
Franklin Street sold 42,601 shares of Intuitive Surgical worth an estimated $23.2 million in the third quarter.
The transaction zeroed out Franklin's Intuitive Surgical stake.
Previously, the position accounted for about 1% of fund assets.
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Franklin Street Advisors disclosed an exit from Intuitive Surgical (NASDAQ:ISRG) in its latest SEC filing for the quarter ended September 30, selling 42,601 shares for an estimated $23.2 million.
What Happened
According to a filing with the Securities and Exchange Commission released on Thursday, Franklin Street Advisors sold its entire holding in Intuitive Surgical, divesting 42,601 shares. The estimated value of the transaction, calculated using the average market price during the quarter, was approximately $23.2 million.
What Else to Know
Franklin Street Advisors' Intuitive Surgical position previously comprised 1.4% of the fund’s 13F assets.
Top holdings after the filing:
- NVDA: $132.2 million (7.6% of AUM)
- MSFT: $115.2 million (6.6% of AUM)
- AAPL: $110.4 million (6.4% of AUM)
- GOOGL: $91.2 million (5.3% of AUM)
- AMZN: $72.5 million (4.2% of AUM)
As of Thursday afternoon, shares of Intuitive Surgical were priced at $443.87, down 9.5% over the past year and underperforming the S&P 500's 16% gain.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Thursday afternoon) | $443.87 |
| Market Capitalization | $159.1 billion |
| Revenue (TTM) | $9.1 billion |
| Net Income (TTM) | $2.6 billion |
Company Snapshot
- Intuitive Surgical offers the da Vinci Surgical System for minimally invasive surgery and the Ion endoluminal system for diagnostic lung procedures, along with surgical instruments, digital solutions, and support services.
- The company generates revenue primarily through the sale of surgical systems, recurring instrument and accessory sales, and service contracts for its installed base.
- It serves hospitals, surgical centers, and healthcare providers globally, targeting institutions seeking advanced minimally invasive surgical capabilities.
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. Its strategic focus on innovation and expanding procedure adoption underpins its long-term growth trajectory.
Foolish take
Franklin Street Advisors’ $23.2 million sale of its entire Intuitive Surgical position marks a clear step back from the medical robotics firm after a volatile year for the stock. Shares have fallen more than 25% from their all-time high in January, as investors weigh valuation concerns and new tariff-related risks that management warned could trim 2025 margins by about 1 percentage point.
In its second-quarter 2025 earnings, Intuitive posted revenue of $2.4 billion, up 21% year-over-year, with worldwide da Vinci procedure volume climbing 17%. Meanwhile, GAAP net income rose 25% to $658 million ($1.81 per share). Yet even with expanding adoption, tightening gross margins—driven by higher input costs and tariffs on components from Mexico, Germany, and China—tempered enthusiasm.
CEO Dave Rosa said Intuitive remains “committed to advancing care” and expanding access to minimally invasive surgery worldwide. But after a multi-year run-up, Franklin’s decision to take profits may signal growing caution among institutional investors who see near-term headwinds outpacing the company’s impressive long-term growth story.
Glossary
13F reportable assets: Assets that institutional investment managers must disclose quarterly to the SEC, showing their holdings in U.S. publicly traded securities.
Assets under management (AUM): The total market value of investments that a fund or firm manages on behalf of clients.
Full exit: When an investor sells all shares of a particular holding, eliminating exposure to that asset.
Stake: The amount of ownership or investment a fund or individual holds in a company or asset.
Filing: An official document submitted to a regulatory authority, such as the SEC, to disclose financial or operational information.
Divesting: Selling off an asset or investment, often to reduce risk or change portfolio strategy.
Minimally invasive surgery: Surgical procedures performed through small incisions, often using specialized instruments or robotic systems.
Installed base: The total number of a company's products currently in use by customers.
Service contracts: Agreements for ongoing maintenance, support, or services related to products sold.
Procedure adoption: The rate at which new medical procedures or technologies are implemented by healthcare providers.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Intuitive Surgical, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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