While the S&P 500 has generated significant wealth over the past 15 years, many investors fear it’s now badly overpriced and ready for a significant correction. Some even think a crash is possible.
Looking around the market, I can see why some investors are nervous. Tesla and Palantir are both going for nosebleed valuations, while some speculative stocks outside the S&P 500 are in a bubble.
Ultimately, nobody knows if the S&P 500 will crash this year. But if it does, I would like to buy this stock.
The business
The share in question is Intuitive Surgical (NASDAQ:ISRG), the global leader in robotic-assisted surgery. Its systems help surgeons carry out procedures with more precision and stability, creating better outcomes for patients.
Intuitive is certainly not a small company any longer, with a price rise of 800% since 2016 taking its market cap to $192bn. Indeed, this would be enough to make it the fourth-largest listed firm on the London Stock Exchange!
Yet despite its significant size, Intuitive is still growing strongly. In Q4, worldwide procedures with its da Vinci surgical system grew roughly 18% year on year, while Ion procedures surged by about 44%.
The da Vinci is Intuitive’s flagship machine, and it placed another 1,721 of them in hospitals last year. This brought the total global installed base to more than 11,000 systems. Around 3.15m procedures were performed with da Vincis last year, an increase of 18%.
The Ion is specifically designed for minimally invasive lung biopsies, helping detect lung cancer at its earliest, most treatable stages. In 2025, the firm placed 195 Ions, with procedures growing 51%.
This all helped full-year revenue grow 21% to just over $10bn, with earnings set to be announced on 22 January.
The stock
The beauty of this business model is that when Intuitive places a machine in a hospital, it essentially acts like a high-margin cash machine for years. That’s because the instruments (staplers, scissors, forceps, etc) regularly need replacing.
Add in the maintenance and software updates needed to keep the robots running, and more than 80% of the top line is recurring revenue.
In 2026 though, management is projecting 13%-15% growth in da Vinci procedures, suggesting a slowdown over last year. This adds risk because the stock is trading at 56 times forward earnings. That’s a significant premium to the S&P 500.
At this price, I see too much valuation risk, particularly if growth expectations slightly disappoint the market. There’s also rising competition in the robotic-assisted surgery space, especially from Medtronic.
Still bullish
Looking further out, I’m very bullish on Intuitive Surgical. Its da Vinci SP, which performs complex surgery through a single incision or a natural orifice like the mouth, just got FDA clearance to perform inguinal hernia repair, cholecystectomy, and appendectomy procedures.
So the applications for its robots continue to grow, while its newest da Vinci 5 has 10,000 times more computing power.
According to the NHS, half a million operations will be supported by cutting-edge robotic surgery every year by 2035, up from 70,000 in 2023/24.
What we have here then is a wonderful company with strong growth potential whose stock is trading very expensively. But if a market meltdown sparks a significant pullback, I’ll jump at the chance to buy more shares.
