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Why Intuitive Surgical Stock Surged 20% in July

By Joe Tenebruso – Updated Aug 4, 2020 at 2:23PM

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The robotic-surgery leader is benefitting as its rivals falter.

What happened

Shares of Intuitive Surgical (ISRG -0.94%) climbed 20.3% last month, according to data provided by S&P Global Market Intelligence. The maker of advanced surgical systems is dominating the robotic healthcare industry, as its competitors struggle to enter the market.

So what

Intuitive Surgical got a boost in mid-July when Johnson & Johnson (JNJ 0.05%) said its robotic surgery program was experiencing delays. With J&J now expecting to begin human trials no sooner than the second half of 2022, Intuitive Surgical will have significantly more time before it'll see increased competition. J&J also said it expects to face a more stringent standard for regulatory approval, which could make it more difficult for the healthcare giant to bring its new robotic devices to market. 

Intuitive Surgical's da Vinci Xi system.

Intuitive Surgical is the undisputed leader in robotic surgery. Image source: Intuitive Surgical.

Wall Street viewed the news as a signal of increasing barriers to entry for Intuitive Surgical's would-be rivals. In turn, several analysts boosted their price targets for the robotic surgery leader's shares. 

Later in July, Intuitive Surgical went on to deliver better-than-expected second-quarter results, which resulted in even more analyst upgrades. 

Now what 

Due to both the technological superiority of its devices and the ongoing struggles of its rivals, Intuitive Surgical is entrenched as the global leader in robotic surgical systems. With its robot-assisted solutions seeing increased adoption in an expanding array of healthcare segments, Intuitive Surgical is well-positioned to deliver even more gains to investors in the years ahead.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Intuitive Surgical. The Motley Fool recommends Johnson & Johnson and recommends the following options: long January 2022 $580 calls on Intuitive Surgical and short January 2022 $600 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Intuitive Surgical Stock Quote
Intuitive Surgical
$262.64 (-0.94%) $-2.49
Johnson & Johnson Stock Quote
Johnson & Johnson
$177.33 (0.05%) $0.09

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