Intuitive Surgical (ISRG) shares tumbled roughly 12% in premarket trading on Friday after the robotic surgery company issued a full-year procedure growth outlook that fell short of investor expectations, overshadowing stronger-than-expected second-quarter earnings. The stock closed at $360.50, marking its steepest single-day drop since April 2022 and its lowest level since January 2024.
The maker of the da Vinci robotic surgery platform reported adjusted earnings of $2.80 per share, comfortably ahead of analysts’ estimates of $2.51. Revenue rose 19% year over year to $2.89 billion, beating Wall Street’s $2.82 billion forecast. Despite the beat, market focus shifted to management’s projection that da Vinci procedure growth for 2026 would range between 13.5% and 15.5%, with growth expected near the midpoint of 14.5%.
A key pressure point was the slowdown in U.S. da Vinci procedures, which grew only 12% in Q2, missing the 13% analysts expected and decelerating from 14% in the prior quarter. Globally, procedures rose 15%, with strength outside the U.S. at 20% growth. Management attributed the softness to patients deferring elective surgeries due to rising insurance costs and the increasing use of weight-loss drugs like Ozempic, while medically necessary procedures remained robust.
Intuitive Surgical placed 468 da Vinci systems during the quarter, up from 395 a year earlier, including 246 units of its latest da Vinci 5 platform. Its installed base grew to 11,710 da Vinci systems globally, and Ion systems increased 21% to 1,096 units. Recurring instruments and accessories revenue climbed 18% to $1.73 billion. The company also lifted its 2026 adjusted gross margin guidance to 68%–69% from a prior 67.5%–68.5%, partly aided by a one-time tariff refund of $28 million after tax.
Meanwhile, competition is mounting. Johnson & Johnson is preparing to launch its Ottova surgical robot, targeting regulatory clearance by year-end, which would challenge Intuitive’s decades-long dominance. RBC Capital Markets analyst Shagun Singh described the U.S. slowdown as “transient rather than a structural shift,” maintaining an Outperform rating with a $575 price target. Wall Street remains broadly positive, with 24 of 35 analysts rating the stock a Buy and a consensus price target implying about 30% upside.
