Intuitive Surgical (NASDAQ: ISRG), a leader in surgical robotics, saw its stock dip despite reporting a 22% revenue jump in its latest earnings. The company's da Vinci robots are widely used, but the real driver of its revenue is not the sale of the robots themselves, but rather the parts and services that support them. This distinction seems to have been overlooked by investors, who may be focusing too much on the competition from Medtronic (NYSE: MDT) and Johnson & Johnson (NYSE: JNJ).
The concern about competition is understandable, as both Medtronic and Johnson & Johnson are well-established medical device makers. However, Intuitive Surgical continues to grow, selling more da Vinci systems in the third quarter of 2026 than it did in the same quarter of 2025. The number of procedures using a da Vinci system rose by 15%, while the number of installed systems increased by 12% year over year. This suggests strong demand for robotic surgery, despite new entrants in the market.
Intuitive Surgical's installed base of over 12,000 systems creates a steady stream of revenue from parts and services. This recurring income supports the company's business, even as surgical robotics gains traction worldwide. The stock price has since recovered from the earnings-related drop, but the initial reaction highlights a perception issue among investors.
Before investing in Intuitive Surgical, consider that the Motley Fool Stock Advisor analyst team did not include it in their list of top 10 stocks for investors to buy now. The list, which has historically included successful picks like Netflix and Nvidia, is based on the team's analysis of potential monster returns in the coming years.