Robots Drive Growth: Intuitive Surges Ahead

Intuitive Surgical concluded 2025 with robust performance, reporting 532 da Vinci surgical robot placements in the fourth quarter, a notable increase from the prior year. The company now boasts over 11,106 operational systems globally, marking a 12% year-over-year rise.

While the placement of these advanced robotic systems is a key indicator, the core of Intuitive Surgical's revenue comes from supporting instruments and accessories, accounting for approximately 60% of sales. The actual sale of the da Vinci robots represents about 25% of revenue, with services making up the remaining 15%.

A significant strength lies in the recurring revenue model, which comprises about 75% of the company's income. This consistent income stream grows with each installed unit, as robots require ongoing maintenance and parts. The increasing utilization of these systems is crucial, evidenced by an 18% rise in procedures performed with da Vinci in 2025 compared to 2024.

Looking ahead, Intuitive Surgical is poised for further growth, with a projected surgery growth rate of up to 15% for 2026. Artificial intelligence represents a major opportunity, with the company actively integrating AI into its products. Recent FDA approval for an AI tool aiding lung biopsies in late 2025 highlights the potential for AI to enhance surgical precision, especially in dynamic environments. The company envisions AI playing an even more significant role in future surgical interventions.

Despite these strengths and future prospects, the company's valuation reflects investor confidence, with a price-to-earnings ratio nearing 67x, substantially higher than the S&P 500's 28x. This high valuation may deter investors with a strong preference for value stocks.