ISRG Intuitive Surgical, Inc.

Intuitive Surgical makes robotic-assisted surgery systems — most famously the da Vinci robot — that let surgeons operate through tiny incisions instead of large cuts. Doctors sit at a console and control robotic arms that hold miniature instruments inside the patient's body, enabling more precise surgery with faster recovery times. More than 12,000 of these systems are installed in hospitals worldwide, and they were used for about 3.3 million procedures in 2025 alone — a 19% jump from the year before. The company employs roughly 15,600 people and generated $10 billion in revenue last year.

What makes Intuitive particularly interesting is how the business compounds over time. Hospitals pay around $1-2 million upfront for a system, but then they must buy Intuitive's proprietary single-use instruments for every single surgery — creating a stream of recurring revenue that grows automatically as surgeons perform more procedures. About 85% of revenue now comes from this recurring stream rather than new machine sales. Management guided for another 14% procedure growth in 2026, and the company carries no debt, with gross margins above 65%.

The central uncertainty is valuation. At roughly $479 per share, the market is placing a $167 billion value on the company. Our model, which projects revenues bottom-up from the installed base, estimates fair value closer to $305 — implying the market is already pricing in a very optimistic long-run growth scenario. The wide fair-value range ($219 to $533) reflects genuine uncertainty about long-term procedure growth and the eventual threat of competing surgical robots entering the market.