Trump's Tariffs Could Impact This Top Growth Stock. Here's Why It's Still a Buy

Core Viewpoint - President Trump's macroeconomic policies, particularly the imposition of tariffs, are creating uncertainty for companies like Intuitive Surgical, although the company remains a strong investment opportunity despite these challenges [1]. Company Performance - Intuitive Surgical has experienced significant growth over the past 18 months, launching the fifth generation of its da Vinci robotic-assisted surgery (RAS) device, which exceeded analysts' expectations [2]. - In the first quarter, the company's revenue reached $2.25 billion, marking a 19$1.81, reflecting a 21% year-over-year increase [3]. Future Projections - The company projects adjusted operating expenses for 2025 to grow between 10% and 14%, with an expected adjusted gross profit margin narrowing to 65% to 66.5%, down from 69.1% in 2024 [4]. - The forecast includes an estimated 1.7% impact from tariffs on revenue, which is significant but not catastrophic [4]. Tariff Impact and Strategy - Intuitive Surgical manufactures 98% of its robotic systems in the U.S., but faces challenges as 70% of its endoscopes are made in Europe and 80% of instruments and accessories are produced in Mexico [5]. - The company is adopting a wait-and-see approach regarding the tariffs and plans to explore mitigation strategies once the situation stabilizes [6]. Market Position and Growth Potential - Intuitive Surgical is the leader in the RAS market, which has significant growth potential due to underpenetration in robotic surgeries and increasing demand from an aging population [7]. - The company benefits from a first-mover advantage in a market with high barriers to entry and substantial switching costs [7]. - Over the next decade, Intuitive Surgical is expected to maintain its top position in the field while delivering strong financial results despite tariff impacts [8].