Intuitive Surgical (ISRG) Stock Has Plunged 33% in 2026. Here's Why One Fund Manager Remains Bullish -- and Why I Do, Too.
Key Points
The robotic surgery specialist has over 12,000 installed systems globally.
Right now, it's facing some headwinds, but it also has a lot going for it.
The Baron Health Care Fund sees Intuitive Surgical as full of promise.
If you're not familiar with Intuitive Surgical (NASDAQ: ISRG), know this: It's a massive robotic surgical systems specialist, with a recent market value topping $135 billion. That market value was quite a bit higher not so long ago, though -- because while the stock has averaged annual gains of 17% over the past decade, it's down 33% so far in 2026.
Two key concerns about the company are competition from China and also, potentially, from OpenAI and artificial intelligence (AI). That might have caused some to sell the stock or simply to steer clear. But the new, lower price should still entice long-term believers: Intuitive Surgical's forward price-to-earnings (P/E) ratio was recently 35, well below its five-year average of nearly 54.
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Image source: The Motley Fool.
The big question is where Intuitive Surgical goes from here; for investors, the future always matters much more than the past. I'd argue that Intuitive isn't going away, because it already has an installed base of more than 12,000 robotic surgery systems in more than 70 countries around the world.
Better still, while hospitals aren't buying its pricey robotic surgery systems every day, they are frequently spending money on instruments, accessories, and servicing the systems they have. That's recurring revenue, which recently made up about 75% of total revenue.
On top of that, the company isn't standing still. It keeps launching newer, improved systems, and its offerings are much more polished and proven than those of would-be competitors. For example, it's expanding into bronchoscopy, and is seeing a lot of use of its machines for emergency surgeries.
I'm not the only bullish investor (and shareholder) around. The Baron Health Care Fund recently wrote:
Medical device stocks ... broadly underperformed the market amid concerns that health care utilization trends could decelerate following the expiration of Affordable Care Act (ACA) subsidies. Concerns were further compounded by the potential impact of Medicaid work requirements expected to take effect in 2027. Despite these headwinds, we believe Intuitive [Surgical] can continue to grow revenue at a mid-teens rate for many years and [we] remain positive on the company's long-term growth outlook.
Wall Street remains generally positive on the stock, with most analysts rating it a buy. Take a closer look at this dynamic company and see what you think. For long-term, risk-tolerant investors, this could be a great buying opportunity.
Selena Maranjian has positions in Intuitive Surgical. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley Fool 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.