Intuitive Surgical Stock: Buy, Sell, or Hold?

Intuitive Surgical (NASDAQ: ISRG) reported exceptional fourth-quarter and full-year 2025 results earlier this year. Revenue and procedure volumes grew at robust double-digit rates as the company continued rolling out its new da Vinci 5 systems to hospitals.

But at a sky-high valuation, does the underlying business momentum justify the stock's price, or are investors better off waiting for a potential pullback?

Let's take a closer look at the medical device maker's recent financial results and its valuation to see whether the stock is a buy, sell, or hold today.

Spoiler alert: I'm not interested in buying the stock at this price. But there is a price at which I'd buy it.

Image source: Getty Images.

Firing on all cylinders

Just because I don't like a stock doesn't mean I can't like the business. It's almost impossible to criticize anything about Intuitive Surgical's recent performance.

It's firing on all cylinders.

Fourth-quarter 2025 revenue rose 19% year over year to about $2.9 billion. This strong finish to the year helped push the company's full-year 2025 revenue up 21% to $10.1 billion.

This top-line momentum was driven by robust utilization of the company's robotic-assisted surgical systems, with worldwide procedure volume for the company's da Vinci and Ion platforms combined growing approximately 18% year over year in the fourth quarter.

Further, hospitals are continuing to heavily invest in the company's hardware. Intuitive placed 532 da Vinci surgical systems during the quarter -- up from 493 in the year-ago period -- pushing its da Vinci installed base to more than 11,100 systems globally.

Highlighting the strong year, Intuitive CEO Dave Rosa said in the company's preliminary earnings release, "In 2025, we saw increased adoption and utilization of our surgical platforms, expanded product clearances and indications for use across geographies, and more than 3.1 million da Vinci procedures performed."

A decelerating growth outlook

But a great business does not automatically make for a great investment. The problem for investors today is what management expects going forward.

For 2026, management guided for worldwide da Vinci procedures to increase by 13% to 15%. While double-digit procedure growth remains an impressive feat for a company of this size, this outlook represents a notable deceleration from the 18% growth the company achieved in 2025.

A step-down in growth like this wouldn't normally be a dealbreaker. But it becomes a serious issue when a stock is priced for perfection.

With that said, the company's guidance typically proves to be conservative. Still, even if procedure growth is in line with growth in 2025, shares just look too expensive.

Priced for perfection

As of this writing, Intuitive Surgical commands a massive market capitalization of about $175 billion and trades at a price-to-earnings ratio of about 63.

At a valuation like this, there is essentially no room for error. Ahead of guidance for a deceleration in procedure volume (the lifeblood of Intuitive Surgical's growth machine), paying more than 60 times earnings simply leaves very little margin of safety.

So, I've already said I don't think the growth stock is a buy today. But is it a sell or a hold?

For investors who already own the stock, it's probably worth holding onto. The company benefits from durable, recurring revenue streams, a massive installed base of systems that hospitals rely on daily, and a long runway for international expansion.

But I'd stay on the sidelines at this price. The stock's sky-high valuation arguably leaves investors exposed to significant valuation risk. Put another way, the stock could suffer if the market decides it no longer wants to pay such a high premium for the stock -- and this could happen even if the business continues executing as well as it has been.

At what valuation would I be interested? Probably at about 45 times earnings.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley Fool recommends the following options: long January 2028 $520 calls on Intuitive Surgical and short January 2028 $530 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.