[Music] Stocks our strategists feel are poised to deliver positive returns are featured now in their top stock picks of the week. Welcome to today's top stock pick. I am Jeremy Mullen along with Ian Feller who will have his pick shortly.But first, we'll be doing Intuitive Surgical, ticker symbol ISRG. Intuitive makes robotic surgery systems that help doctors perform minimally invasive procedures. Their flagship product is the Da Vinci robot, which gives surgeons better vision, control, and precision than tr ...

Market Overview - The global medical robot market was valued at USD 11.51 billion in 2024 and is projected to reach approximately USD 39.07 billion by 2034, with a CAGR of 13% from 2024 to 2034 [1][34]. Market Drivers - Key drivers of market growth include technological innovation, high adoption of surgical robots, an increase in the number of surgical procedures, and broad health coverage plans for robot-assisted surgeries [1][5]. - The demand for minimally invasive surgeries is rising, leading to improved patient outcomes, reduced recovery times, and lower complication rates [29][30]. Regional Insights - North America dominated the surgical robotics market in 2024 and is expected to maintain its leadership position due to advancements in robotic surgery technologies and strong healthcare infrastructure [5][40]. - Europe is anticipated to experience the fastest growth in the market, driven by increasing investments in healthcare innovation and expanding adoption of robotic systems across hospitals and clinics [5][42]. Market Segmentation - The surgical robots segment led the market in 2024 and is expected to maintain its dominance due to the growing demand for minimally invasive procedures [5][35]. - The pharmacy and hospital automation robots segment is projected to experience the fastest growth, driven by the need for improved operational efficiency and the rising trend of automation in healthcare settings [5][36]. Technological Advancements - The integration of AI and machine learning in medical robotics is enhancing surgical precision, enabling real-time decision-making, and improving patient outcomes [11][32]. - The da Vinci 5 Surgical System, introduced by Intuitive Surgical, represents a significant advancement in robotic-assisted surgery, featuring enhanced haptic technology and AI-driven insights [13][17]. Clinical Impact - The adoption of the da Vinci 5 system has led to a decrease in average patient recovery time by 22% and a reduction in post-surgical complications by 18% compared to traditional methods [21][22]. - Enhanced surgical precision and reduced error margins have been reported, with surgical precision improving from ±2.5 mm to ±1.1 mm after the system's implementation [22][24]. Competitive Landscape - Intuitive Surgical continues to dominate the market, accounting for over 70% of global surgical robotics revenue in 2024, prompting competitors like Medtronic and Stryker to advance their own AI-assisted systems [25][26]. - The market is witnessing a wave of innovation as companies strive to enhance their robotic systems and improve operational efficiency in healthcare settings [25][26]. Future Outlook - The medical robot market is expected to expand globally, with significant investments and developments in regions like Asia and the Middle East, supported by government initiatives and regulatory approvals [11][42]. - The focus on minimally invasive and remote surgeries is likely to drive further advancements in robotic technology, making surgeries safer and more accessible [11][32].

Core Insights - Intuitive Surgical and Boston Scientific reported strong third-quarter results, highlighting their distinct growth strategies in the medtech sector [1][2] Financial Performance - Intuitive Surgical achieved third-quarter revenues of approximately $2.5 billion, reflecting a nearly 20% year-over-year increase, driven primarily by a 19% rise in da Vinci procedures and a 52% surge in Ion lung biopsy procedures [3][7] - Boston Scientific reported over $5 billion in revenues for the third quarter, marking around 15% organic growth, with an adjusted gross margin improvement to about 71% due to high-growth categories like electrophysiology [4][8] Growth Strategies - Intuitive Surgical focuses on deepening its surgical robotics franchise, with the da Vinci 5 system accounting for over half of its system placements, and expanding its Ion and SP platforms [10][16] - Boston Scientific adopts a diversified approach, leveraging multiple franchises such as WATCHMAN and FARAPULSE, and pursuing an active M&A strategy to enhance its product pipeline and market presence [12][17] Market Position and Valuation - Both companies hold a Zacks Rank 2 (Buy), with Boston Scientific viewed as more attractively valued compared to the industry, while Intuitive Surgical's valuation has declined but remains above the industry average [7][23][30] - Year-to-date, Intuitive Surgical shares have risen 4.5%, while Boston Scientific shares have gained 13%, reflecting the latter's stronger performance due to its diversified business model [18] Future Prospects - Intuitive Surgical's future growth will depend on the global adoption of the da Vinci 5 and the effectiveness of its new features, alongside its reliance on recurring revenues from procedures [19] - Boston Scientific's prospects hinge on its ability to scale multiple growth engines, particularly in electrophysiology and the WATCHMAN-ablation procedures, while managing the complexities of numerous product launches [20][22]

Core Insights - Intuitive Surgical (ISRG) reported strong third-quarter 2025 performance, with adjusted earnings per share of $2.40, exceeding the consensus estimate of $1.99, and revenues increased by 23% year over year to $2.51 billion, driven by robust procedure growth and higher system placements [1][11] Group 1: Performance Metrics - Worldwide procedure volumes rose by 20%, with da Vinci procedures increasing by 19% and Ion lung biopsy procedures soaring by 52% [2] - The installed base of da Vinci systems grew by 13% to nearly 10,800, with over 900 da Vinci 5 systems now in operation [2] Group 2: Growth Drivers - The da Vinci 5 upgrade cycle has stimulated demand and utilization, with nearly 90% of da Vinci 5 procedures utilizing integrated technologies [3] - International markets contributed to a 25% growth in procedures, supported by placements in Japan, Europe, and emerging markets [2] Group 3: Challenges and Competition - Management noted ongoing declines in bariatric surgery volumes due to GLP-1 adoption and competitive pressures in China [4] - Johnson & Johnson (JNJ) is intensifying its focus on robotic surgery with its OTTAVA system, planning to file for FDA submission in early 2026 [6][7] - Stereotaxis is advancing its GenesisX robotic surgery platform, with CE Mark approval secured and initial hospital installations planned for 2025 [8][9] Group 4: Financial Outlook - Gross margin decreased by 90 basis points year over year to 68%, influenced by tariffs, product mix, and higher facility costs [4] - The Zacks Consensus Estimate for Intuitive Surgical's 2025 earnings suggests a 17.3% increase from the previous year [14] - Intuitive Surgical's stock has gained 5.6% year-to-date, outperforming the industry [12]

Core Insights - Intuitive Surgical has maintained a dominant position in the robotic-assisted surgery (RAS) market for nearly 20 years, but is now facing increased competition, particularly from Medtronic's Hugo system [1][2] Company Overview - Intuitive Surgical launched its da Vinci system in 2000 and has received regulatory approval for multiple iterations, with the fifth generation approved last year [3] - The installed base of the da Vinci system reached 10,763 units as of Q3, reflecting a 13% year-over-year increase [3] Financial Performance - In Q3, Intuitive Surgical reported sales of $2.51 billion, a 23% increase compared to the same period last year [4] - The company's non-GAAP earnings per share (EPS) were $2.40, up from $1.84 in the previous year [4] Market Potential - The RAS market remains underpenetrated, presenting significant growth opportunities as robotic systems facilitate minimally invasive surgeries with better outcomes than traditional methods [5] - Intuitive Surgical benefits from a strong economic moat due to high switching costs associated with its da Vinci system, which includes a steep learning curve and high price [5] Strategic Challenges - Despite facing challenges such as tariffs, Intuitive Surgical is expected to navigate these issues, potentially through negotiations or by passing costs onto clients [6] - The company's stock performance has lagged behind the S&P 500 this year, but its long-term outlook remains positive [6] Competitive Landscape - Intuitive Surgical is the market leader in robotic surgery systems with ample growth prospects, while Medtronic offers a diversified business model and a strong dividend history [7]

Core Insights - Intuitive Surgical and Medtronic are both involved in the surgical robotics market but cater to different investor preferences, with Intuitive Surgical focusing on growth and Medtronic appealing to income investors [1] Group 1: Intuitive Surgical - Intuitive Surgical is a leader in surgical robotics, with 10,763 da Vinci systems in use as of Q3 2025, representing a 13% year-over-year increase, and a 19% rise in procedures performed [2] - The Ion endoluminal system, a newer product, has shown rapid growth with a 30% increase in systems installed and a 52% increase in procedures performed, albeit from a smaller base of 954 systems [4] - Approximately 75% of Intuitive Surgical's revenue comes from the sale of instruments, accessories, and services, creating a recurring income stream that grows with each surgical system sold [5] - The stock has a high price-to-earnings ratio of over 60x and has experienced significant volatility, with price drops of 20% or more occurring three times since 2020 [7] - Recent positive earnings have renewed interest in Intuitive Surgical's shares, making it an attractive option for growth investors willing to accept volatility [11] Group 2: Medtronic - Medtronic offers a more stable investment option with a 3% dividend yield and is nearing its status as a Dividend King, having increased dividends for 48 consecutive years [8][9] - The company has a diversified product portfolio that includes cardiovascular, neuroscience, and diabetes products, although it is in the process of spinning off its diabetes division to focus on core opportunities [9][10] - Medtronic's market cap is $120 billion, with a current price of $93.67 and a gross margin of 59.81%, making it a more conservative choice for income-focused investors [10]

Market Performance - The S&P 500 index increased by 2.4% this week, while the Nasdaq rose by 3.9%[1] - Large-cap growth stocks (Russell 1000 Growth) outperformed with a gain of 3.2%, compared to small-cap value (Russell 2000 Value) at +2.5%[1] - The technology hardware and equipment sector led the gains with an increase of 3.9%[1] Fund Flows - Estimated fund flow for S&P 500 components was +$65.6 billion this week, down from +$91.7 billion last week[2] - Semiconductor products and equipment saw the highest inflow at +$22.9 billion, while media and entertainment experienced the largest outflow at -$13.2 billion[2] Earnings Forecast - The forward 12-month EPS estimate for S&P 500 components was revised up by 0.4% this week, consistent with the previous week[3] - The automotive sector saw a significant upward revision of 9.0% in earnings expectations, while durable goods and apparel experienced a downward revision of -0.5%[3] Risk Factors - Key risks include uncertainties in economic fundamentals, international political situations, U.S. fiscal policies, and Federal Reserve monetary policies[3]

Core Insights - Intuitive Surgical, Inc. (NASDAQ:ISRG) has recently experienced a stock rally, attributed to the company's impressive performance and the potential for a pullback due to high stock prices [1] - The company specializes in designing and manufacturing robotic systems for minimally invasive surgical and diagnostic procedures [2] Group 1 - The stock of Intuitive Surgical has gained attention due to its recent performance, contrasting with previous periods of lower utilization of its Da Vinci surgical machine [1] - There is a belief that while Intuitive Surgical has investment potential, certain AI stocks may offer greater upside potential and lower downside risk [2] Group 2 - The article suggests that investors looking for undervalued AI stocks that could benefit from current economic trends should consider alternatives to Intuitive Surgical [2]

Core Insights - Intuitive Surgical, Inc. (NASDAQ:ISRG) is a leading company in the surgical robotics market, with a year-to-date share price increase of 5.2% and a significant jump of over 17% in October following its third-quarter earnings report [2] - The company reported $2.51 billion in revenue and earnings per share of $2.40, both exceeding analyst expectations [2] - Intuitive Surgical anticipates a growth in procedures performed by its DaVinci robots, projecting an increase of 17% to 17.5% in 2025, which is an upward revision from the previous estimate of 15.5% to 17% [2] Company Performance - The third-quarter earnings report highlighted strong financial performance, with revenue and earnings surpassing analyst estimates [2] - The stock's performance has been positively influenced by the company's growth outlook and tangible product offerings, as noted by Jim Cramer [2][3] Market Position - Intuitive Surgical is recognized for its tangible products in contrast to more speculative stocks, which enhances its appeal to certain investors [2] - Despite the positive outlook, there are concerns regarding increased competition in the surgical robotics industry, as mentioned by Jim Cramer [3]

Core Insights - Intuitive Surgical's shares surged 23% following the release of Q3 earnings, which exceeded investor expectations, with a revenue growth of 23% year over year [1][10] - The company has been actively repurchasing shares, indicating management's confidence in the stock's valuation [5] - Intuitive Surgical is guiding for a 17% growth in Da Vinci surgery procedures for 2025, reflecting the ongoing expansion of robotic surgeries globally [6] Financial Performance - In Q3, Intuitive Surgical placed 427 surgical systems, an increase from 379 in Q3 2024 and 395 in Q2 2025, contributing to quarterly revenue of $2.5 billion [4] - The EBIT margin has expanded to 29% over the last 12 months, showing consistent growth since early 2023 [4] Market Position - Intuitive Surgical has dominated the robotic surgery market, with a cumulative revenue growth of 300% over the last decade, and is expected to maintain a double-digit annual growth rate [8] - The current price-to-earnings ratio (P/E) stands at 73, which is significantly higher than the S&P 500 average, suggesting that the stock may be overvalued at present [9]