Why Congress Is Buying Intuitive Surgical Ahead of Earnings
Intuitive Surgical Inc. (NASDAQ: ISRG) is entering a potential breakout window as it heads into its next earnings report on October 21, 2025. A wave of recent developments has improved the outlook and set the stage for a possible rally leading into—or following—the announcement.
With new FDA approvals and a green light for European expansion, Intuitive Surgical now has access to a much larger, more actionable customer base. These developments have meaningfully expanded its addressable market and could drive increased adoption of its systems across both the United States and abroad.
That broader reach should begin to show up in improved earnings results over the coming quarters. As is often the case in the healthcare sector, regulatory developments play a pivotal role in shaping investor sentiment.
Notably, there’s growing speculation that key regulations could soon clear, especially given recent buying activity from several U.S. Congress members—a signal that hasn't gone unnoticed by the market. As a result, investors are now assigning a premium valuation to the company, reflecting heightened expectations for future growth. For retail investors, this is an opportunity worth serious consideration.
Why Intuitive Surgical Can Win
Intuitive Surgical develops artificial intelligence-driven robotics for surgical procedures, enabling medical professionals to perform these procedures remotely with precision and accuracy. Given the nature of this company's industry, it is inherently surrounded by moats that neither competition nor the adoption of artificial intelligence can breach.
That could be why markets view this as the premium company, but there is much more behind it. One of these drivers is the recent FDA approval for Intuitive Surgical’s da Vinci 5 software features, which will facilitate further adoption of this technology and enable remote surgical procedures aided by robotics and artificial intelligence.
Secondly, the Ion endoluminal system trials have now been cleared across Europe and the United States, involving over 2,000 subjects. These studies increase the likelihood that this company will begin to report more diversified and rapidly growing revenue streams, enhancing its valuation.
Despite these bullish factors, the stock trades at only 70% of its 52-week high (well into bear market territory), creating a more attractive risk-to-reward ratio for new and existing shareholders. Some of these new shareholders include congressional members who may or may not possess valuable information regarding future FDA approvals and developments.
Markwayne Mullin bought up to $100,000 at an average price of $443.99 per share, or Ro Khanna, who bought up to $15,000 at an average of $466.66. These purchases were made in September 2025, just a month before the company releases its quarterly results, likely to include some positive guidance given the recent FDA approvals and European expansion.
What Markets Think of Intuitive Surgical Stock
The most clear-cut way investors can gauge sentiment is through valuation multiples. In the case of Intuitive Surgical, a price-to-earnings ratio of 59.9x indicates a significant preference for this stock. This multiple commands a steep premium for the medical instruments industry, at only 26.3x, and there must be a reason why markets are willing to overpay here.
The Wall Street analyst consensus price target on the stock is $589.43 per share, which implies a 37.2% upside potential from its current trading price, not accounting for the potential financial benefits that could arise from recent developments.
Despite these tailwinds, the company reported net earnings per share (EPS) of $2.19 in its latest quarterly results, 13% above the MarketBeat consensus of $1.93. This trade can work for many fundamental reasons, but it also goes beyond Intuitive Surgical’s business.
The Healthcare Select Sector SPDR Fund (NYSEARCA: XLV) has underperformed the broader S&P 500 index by approximately 22% over the past 12 months, marking the widest spread in over a decade. This means that healthcare stocks, overall, are compressed in terms of valuations and price action.
Should a recovery extend to the entire sector, Intuitive Surgical can amplify its bullish fundamentals and accelerate its rally higher alongside its other peers in the space, thereby creating a fantastic risk-to-reward setup.
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