1 Reason Intuitive Surgical (ISRG) Is 1 of the Best Healthcare Stocks You Can Buy Today

Key Points

• Intuitive Surgical's robots help surgeons perform millions of procedures annually.

• Outfitting a room for a da Vinci machine and training surgeons to use it is an expense hospitals generally want to avoid.

• High switching costs are an advantage that could allow this company's rapid growth rate to continue for many years.

• 10 stocks we like better than Intuitive Surgical ›

Shares of Intuitive Surgical (NASDAQ: ISRG) are down about 26% from a high-water mark they set earlier this year, but the healthcare stock's long-term shareholders aren't too upset. Despite the recent decline, shares of the robot-assisted surgical system provider are up by a whopping 5,490% over the past 20 years.

Shares of Intuitive Surgical have been beaten down this year in response to a competitive threat from Medtronic, a behemoth in the medical technology industry. The company's Hugo RAS system produced successful results in a urologic procedure study in April. Urologic procedures make up about 20% of all procedures performed with Intuitive's da Vinci machines.

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Image source: Getty Images.

Medtronic submitted an application to the Food and Drug Administration in the first quarter that could allow the company to begin marketing its device in the U.S. in early 2026. Before getting too concerned about a competitive threat in the U.S., investors should know that Hugo RAS earned its first marketing approval from European regulators in 2021. Sales still aren't high enough to be mentioned in the company's earnings reports.

In 2024, da Vinci systems performed 2.68 million procedures. Last year alone, the company increased the number of da Vinci machines in hospitals by 1,790 to reach a whopping 11,040 around the globe.

The hospitals that invest in da Vinci systems also invest a great deal in training the surgical teams that operate them. The switching costs are so high that competitors like Medtronic have a hard time gaining market share.

Despite falling a long way this year, shares of Intuitive Surgical are still trading north of 55 times earnings estimates. That's a high valuation, but the company also expects procedure volume to soar by 15.5% to 17% this year. Investors with a high risk tolerance probably want to take a closer look.

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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley Fool recommends Medtronic and recommends the following options: long January 2026 $75 calls on Medtronic and short January 2026 $85 calls on Medtronic. The Motley Fool has a disclosure policy.