Intuitive Surgical (NASDAQ: ISRG) has faced challenges over the past year. President Donald Trump’s aggressive tariffs are impacting its financial results, and it’s now facing more competition than it has arguably ever had in the market for robotic surgery, among other issues.
Despite all that, Intuitive Surgical’s long-term outlook remains bright. Here’s why the stock could deliver superior returns over the next decade.
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There is one key reason Intuitive Surgical can overcome the obstacles — the company benefits from a wide moat, based on multiple factors.
One is that its famous, market-leading da Vinci system is expensive, requires a steep learning curve, and has been incorporated in many programs to train surgical residents and fellows. The da Vinci system is deeply entrenched in many medical facilities, making it hard for them to switch to a competing device without losing the heavy up-front investment they made to acquire it or the countless hours medical staff invested in training on it. That’s one significant advantage.
Another is that the da Vinci system has been on the market for over two decades, and there is a wealth of data demonstrating its efficacy and improved patient outcomes across a range of indications. Newcomers to the field may have aced clinical trials to earn clearance, but the real-world data isn’t easy to replicate, and grants Intuitive Surgical a leg up.
We can also highlight the medical device specialist‘s innovative capabilities. In 2024, it launched the fifth version of the da Vinci system, with new and improved features.
Intuitive Surgical can leverage these advantages to mitigate the effects of tariffs — perhaps by raising prices slightly, something it can afford to do without losing many customers, thanks to its market leadership. So its installed base should continue growing.
Meanwhile, the company should also secure new approvals for the da Vinci system. These label expansions will help increase the device’s addressable market. With an expanding installed base and more indications under its belt, its procedure volume should also move in the right direction and help boost revenue and profits.
Even with mounting competition, Intuitive Surgical should be fine, especially considering that the market for robotic-assisted surgery is underpenetrated. And over the next decade, we should also see an aging population, which will drive growing demand for many of the procedures handled by the da Vinci system.
