Intuitive Surgical Stock Has Plunged 29% This Year. Is the Market Overreacting?

Intuitive Surgical (NASDAQ: ISRG) shareholders are used to winning. But they have done nothing but lose so far in 2026. The giant medical device stock has plunged roughly 29% year to date.

Is the market responding to real risks with Intuitive's underlying business? Or is it overreacting to overblown fears?

Image source: Intuitive Surgical.

Why Intuitive Surgical stock has plunged

Probably the main reason behind Intuitive Surgical's slide this year is the slowing procedure growth for its da Vinci surgical robots. In the fourth quarter of 2025, da Vinci procedure volumes rose 17%. In Intuitive's latest quarter, the growth rate was 15%. The company projects full-year da Vinci procedure growth of 13.5% to 15.5%.

The increased use of GLP-1 weight-loss drugs is one factor in this slowdown. Intuitive Surgical CFO Jamie Samath acknowledged in the company's Q2 earnings call that U.S. da Vinci bariatric cases declined by a high single-digit percentage in Q2.

Intuitive Surgical faced another challenge with subsidies for Affordable Care Act (ACA) health plans expiring. Samath said there was "a modest adverse impact to Q2 U.S. da Vinci procedure growth" from these expirations. He also noted that some customers have voiced concerns about ACA enrollment trends, although this hasn't impacted Intuitive's capital pipeline thus far.

CEO David Rosa also mentioned in the Q2 call that Intuitive Surgical faces increased competition in China. Competition is heating up in the U.S. and other markets, as well, though, with robotic surgical systems from deep-pocketed rivals such as Johnson & Johnson (NYSE: JNJ) and Medtronic (NYSE: MDT).

Are investors overreacting?

With Intuitive Surgical facing multiple headwinds, it's unsurprising that the stock has faltered. However, many on Wall Street believe that the sell-off is overdone.

Of the 32 analysts surveyed by S&P Global (NYSE: SPGI) in September, 24 rated Intuitive Surgical's stock as a "buy" or "strong buy." The average 12-month price target indicated a potential 18% upside. Bernstein analyst Lee Hambright is especially bullish about the healthcare stock. His price target is 70% above Intuitive's current share price.

Is this optimism warranted? I think so.

Around 3.2 million procedures were performed using Intuitive Surgical's da Vinci robotic surgical system last year. The company estimates that roughly 9 million procedures are performed annually for which it already has products and regulatory clearances. And around 20 million procedures per year are good candidates for minimally invasive surgeries using robotic systems.

Those numbers are likely to grow. Aging demographic trends in the U.S., Asia, and Europe should drive greater demand for the types of surgeries that da Vinci and Intuitive's other robotic surgical system, Ion, can perform.

Intuitive Surgical's stock has experienced several declines of 30% or more through the years. Every single time in the past, these pullbacks presented great buying opportunities for patient investors. I suspect that this time will be no different.

Keith Speights has positions in Intuitive Surgical. The Motley Fool has positions in and recommends Intuitive Surgical, Medtronic, and S&P Global. The Motley Fool recommends Johnson & Johnson and 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.