Whereas the S&P 500 has generated important wealth over the previous 15 years, many buyers worry itβs now badly overpriced and prepared for a big correction. Some even assume a crash is feasible.
Wanting across the market, I can see why some buyers are nervous. Tesla and Palantir are each going for nosebleed valuations, whereas some speculative shares outdoors the S&P 500 are in a bubble.
Finally, no one is aware of if the S&P 500 will crash this yr. But when it does, I wish to purchase this inventory.
The enterprise
The share in query is Intuitive Surgical (NASDAQ:ISRG), the worldwide chief in robotic-assisted surgical procedure. Its methods assist surgeons perform procedures with extra precision and stability, creating higher outcomes for sufferers.
Intuitive is definitely not a small firm any longer, with a value rise of 800% since 2016 taking its market cap to $192bn. Certainly, this is able to be sufficient to make it the fourth-largest listed agency on the London Inventory Alternate!
But regardless of its important measurement, Intuitive remains to be rising strongly. In This fall, worldwide procedures with its da Vinci surgical system grew roughly 18% yr on yr, whereas Ion procedures surged by about 44%.
The da Vinci is Intuitiveβs flagship machine, and it positioned one other 1,721 of them in hospitals final yr. This introduced the whole world put in base to greater than 11,000 methods. Round 3.15m procedures had been carried out with da Vincis final yr, a rise of 18%.
The Ion is particularly designed for minimally invasive lung biopsies, serving to detect lung most cancers at its earliest, most treatable phases. In 2025, the agency positioned 195 Ions, with procedures rising 51%.
This all helped full-year income develop 21% to simply over $10bn, with earnings set to be introduced on 22 January.
The inventory
The fantastic thing about this enterprise mannequin is that when Intuitive locations a machine in a hospital, it primarily acts like a high-margin money machine for years. Thatβs as a result of the devices (staplers, scissors, forceps, and so forth) frequently want changing.
Add within the upkeep and software program updates wanted to maintain the robots working, and greater than 80% of the highest line is recurring income.Β Β
In 2026 although, administration is projecting 13%-15% progress in da Vinci procedures, suggesting a slowdown over final yr. This provides danger as a result of the inventory is buying and selling at 56 instances ahead earnings. Thatβs a big premium to the S&P 500.
At this value, I see an excessive amount of valuation danger, significantly if progress expectations barely disappoint the market. Thereβs additionally rising competitors within the robotic-assisted surgical procedure house, particularly from Medtronic.
Nonetheless bullish
Wanting additional out, Iβm very bullish on Intuitive Surgical. Its da Vinci SP, which performs advanced surgical procedure by means of a single incision or a pure orifice just like the mouth, simply bought FDA clearance to carry out inguinal hernia restore, cholecystectomy, and appendectomy procedures.
So the functions for its robots proceed to develop, whereas its latest da Vinci 5 has 10,000 instances extra computing energy.
In accordance with the NHS, half one million operations will likely be supported by cutting-edge robotic surgical procedure yearly by 2035, up from 70,000 in 2023/24.
What now we have right here then is a superb firm with robust progress potential whose inventory is buying and selling very expensively. But when a market meltdown sparks a big pullback, Iβll soar on the probability to purchase extra shares.
