Intuitive Surgical's Growth Has Cooled From Its Post-Pandemic Highs. Is That a Buying Opportunity or a Warning?

Intuitive Surgical (NASDAQ: ISRG) is a volatile stock to own. Since its initial public offering, the stock has suffered eight drawdowns of 30% or more. Two of the drawdowns were over 70%. Right now, the stock is in the middle of a drawdown that has it off its recent highs by roughly 40%.

Historically, the stock has recovered from each drawdown and gone on to higher highs. That suggests that the current sell-off is a buying opportunity. However, there have been big changes in the surgical robotics space that investors have to consider, as well. Here's a look at whether or not Intuitive Surgical is worth buying today. (Hint: Selling new robots isn't the biggest piece of the story.)

Image source: Getty Images.

Intuitive Surgical: Growth isn't what it used to be

Intuitive Surgical was a pioneer in the surgical robots space, with its da Vinci system being one of the first and most widely available options. Being early allowed the company to grow its business at a fairly rapid clip. The fact that robot-assisted surgery generally requires smaller incisions and leads to better outcomes was a big selling point. Early on, investors tracked the company's da Vinci sales very closely, and they still do.

The sale of new da Vinci robots is important. But the market has new entrants, including medical device giants like Medtronic (NYSE: MDT) and Johnson & Johnson (NYSE: JNJ). These are well-heeled competitors with strong industry connections. The playing field is much different now than it was two decades ago. Simply put, there's more competition. So it makes sense that Intuitive Surgical's business would slow down a bit.

It is still selling da Vinci systems, noting that it placed 468 in the second quarter of 2026, up from 395 in the second quarter of 2025. But Wall Street clearly wasn't pleased, given the sell-off in the shares.

ISRG data by YCharts

What's interesting is that the first number the company talks about isn't new da Vinci placements; it is the number of surgeries performed with da Vinci robots. The number of surgeries rose 16% year over year, even though the number of da Vinci systems being used globally increased by 12%. That difference is very important.

The flywheel is parts and services

Intuitive Surgical breaks down its revenues across new robot sales, services, and instruments and accessories (basically, parts). New robot sales accounted for only around 24% of total sales in the second quarter of 2026. So 75% of the company's top line comes from maintaining the surgical robots it already has in place.

These are annuity-like income streams that will remain in place until those da Vinci systems are no longer being used. Given the cost of a surgical robot and the demand for robotic surgery, it is unlikely that a hospital will prematurely shut down a da Vinci robot just to switch to a competitor's surgical robot. So growth may slow down, but the core of the business remains strong.

And then there's the opportunity from continued technological advances. Most notably, artificial intelligence (AI) is already being used to assist surgeons. It doesn't seem unrealistic to believe that AI could perform basic surgery on its own someday. That would greatly increase access to medical care globally. In other words, there are still opportunities for Intuitive Surgical to grow. Perhaps that growth won't be as rapid, but so long as it continues to sell new da Vinci systems, its annuity-like parts-and-services business will grow even more powerful.

Intuitive Surgical looks historically cheap

Intuitive Surgical is best suited to more aggressive growth investors. So conservative types should probably avoid the historically volatile stock. But, if you can stomach big price swings, history suggests that large drawdowns are a buying opportunity. And, notably, the stock's price-to-sales, price-to-earnings, and price-to-book ratios are all below their five-year averages. So, too, is the price-to-forward earnings ratio, which accounts for Wall Street's growth expectations. Basically, the current drawdown has left this growth stock looking cheap again.

Reuben Gregg Brewer has positions in Medtronic. The Motley Fool has positions in and recommends Intuitive Surgical and Medtronic. 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.