Where Will Intuitive Surgical Stock Be in 10 Years?

Intuitive Surgical (NASDAQ: ISRG) is a growth stock, and because of that, it is evaluated differently by investors. For instance, investors pay a huge amount of attention to the number of da Vinci surgical robots that it sells every quarter.

And yet, while the company's business model depends on the sale of da Vinci robots, that's not the real driver of the business. In 10 years, the power of Intuitive Surgical's business will likely be even more apparent than it is today for those investors who examine the income statement.

What does Intuitive Surgical do?

Intuitive Surgical's da Vinci surgical robot was one of the first surgical robots to hit the market. It has been well received, and new robots continue to sell strongly. So, from a big-picture perspective, Intuitive Surgical is a medical device company that sells surgical robots. It isn't wrong to look at the company in this way. However, there's a bigger story that needs to be understood here.

Image source: Getty Images.

The company's income statement breaks down its sales into three line items. One of those lines is "systems," which basically means the sale of da Vinci robots. It's an important source of revenue and the foundation of the business. After all, without the da Vinci surgical robot, there wouldn't be an Intuitive Surgical.

Notably, the company placed 427 da Vinci surgical systems into service in the third quarter of 2025, compared to 379 in the same quarter of 2024. At the end of the quarter, 10,763 systems were being used worldwide, representing a 13% year-over-year increase. All that is good news, with the sale of new units leading to a nearly 33% increase in the revenue assigned to the "systems" segment.

Investors definitely have to pay close attention to da Vinci Systems' sales. However, that line item only accounts for about 25% of the top line. The flywheel of the business is the other 75% of sales.

Intuitive Surgical's annuity-like business is getting bigger and bigger

The two other income lines are services, and instruments and accessories. Of the two, services is less important, accounting for around 15% of the top line. This is basically revenue from servicing da Vinci surgical robots. That means the biggest and most important revenue source for Intuitive Surgical is instruments and accessories, accounting for around 60% of overall sales.

Every time a da Vinci surgical robot is used to perform a surgery, the potential sale of instruments and accessories increases. That's why it's notable that the number of da Vinci surgical robots rose 13% year over year in Q3 2025, but the number of surgeries using da Vinci systems increased 20%. The real flywheel for Intuitive Surgical is its parts and services business. This is a growth story, but one that is only partly driven by the sale of surgical robots.

Roughly a decade ago, the sale of da Vinci robots accounted for around 30% of the company's revenue. If the next decade follows a similar pattern, the sale of new robots could be down to 20% of the top line, with parts and services making up as much as 80%. That income is annuity-like in nature, providing reliable and recurring income.

Intuitive Surgical isn't cheap

By most measures, Intuitive Surgical is an expensive stock. For example, its price-to-earnings (P/E) ratio is 72x, which is significantly higher than the S&P 500's average P/E of around 29x. That said, Intuitive Surgical's P/E is roughly in line with its own five-year average. Thus, it is expensive on an absolute basis and relative to the market, but looks about average compared to its own history.

However, the real story here is this growth stock's ability to expand its parts and services sales. With surgeries growing faster than the number of new da Vinci systems being installed, that flywheel looks well-positioned to continue growing over time. In 10 years, if history is any guide, the business will be even more heavily weighted toward this annuity-like revenue stream. If you step into buying this stock, that's the story you need to watch over the next decade.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley Fool has a disclosure policy.