What happened
Shares of Intuitive Surgical (ISRG -1.16%) had jumped by 5.3% as of 3:22 p.m. ET on Tuesday. The solid gain came as the overall market rose due in large part to waning concerns about the omicron variant.
So what
It's still too early to know for sure what the full impact of the omicron variant will be. But many scientists, including Dr. Anthony Fauci, chief medical advisor to President Joe Biden, think that the strain could be milder than feared.
If they're right, it would be great news for Intuitive Surgical. In 2020, the company's business took a hit as healthcare providers postponed nonemergency surgical procedures due to the pandemic.
The da Vinci surgical robot. Image source: Intuitive Surgical.
Intuitive typically makes in the ballpark of 77% of its total revenue from recurring sources, including replacement instruments and accessories tied to its procedure volume. Lower procedure volumes directly translate to lower revenue for the company.
The omicron variant appears to be more contagious than the delta variant. If the spread of the coronavirus worsened and caused more cases of severe COVID, less-crucial surgical procedures could have been pushed back again. With such concerns declining, though, that now seems to be less of a threat to Intuitive Surgical.
Now what
Investors following the company will still want to closely monitor what happens with the omicron variant and COVID cases. There could still be a negative effect on the healthcare stock. However, the future generally looks bright for Intuitive as it continues to dominate the robotic surgical systems market.
