The market, in its infinite caprice, has a way of rewarding those who listen closely to its murmurs. Philippe Laffont, a man who once navigated the labyrinth of technology stocks before founding Coatue Management, has long understood this. His fund, now a leviathan of $35 billion, has thrived on such whispered secrets.
Yet even the most attuned ear can waver. This year, Laffont’s sudden disengagement from Super Micro Computer-a company whose servers hum in the shadowy heart of data centers-spoke of a shift. The hedge fund, once bullish on its contrarian bet, now held not a single share by June’s end.
With one hand, Coatue let go; with the other, it reached for Intuitive Surgical (ISRG). In the second quarter, 39,512 shares of the robot-assisted surgery pioneer found their way into the fund’s portfolio. A curious choice, given the stock’s recent stumble-a 26% retreat from its February peak. But then, the market is not a ledger of logic.
A Colossus Cast in Steel and Shadow
Shares of Intuitive Surgical have risen 19,390% since its IPO, a number that glitters like a mirage. The company’s da Vinci system, the first robotic surgical tool cleared by the FDA for minimally invasive abdominal procedures, was a revolution. Or so the narrative insists.
Today, 11,040 of these machines hum in hospitals worldwide. Last year, their blades-virtual and otherwise-saw 2.7 million procedures. Even the newer Ion system, for lung tumors, claimed 95,000 operations. Yet for all this, the market remains a patchwork of old habits and new rivals.
Medtronic, Johnson & Johnson, and Stryker have entered the fray, their surgical robots circling like vultures. But they are latecomers, and Intuitive Surgical, for all its flaws, remains the industry’s reluctant monarch. Hospitals spend millions on its systems, only to find themselves tethered to a cycle of recurring purchases-84% of last year’s revenue came from disposable instruments, a fact as mundane as it is profitable.
The Weight of Tariffs and the Whispers of Competition
Intuitive Surgical’s stock, once a paragon of growth, now bears the marks of a market’s unease. Tariffs loom like a distant storm, and the company’s adjusted gross margin guidance-66% to 67%-feels like a concession to gravity. Yet this is but a temporary wobble, a hiccup in a longer dance.
Medtronic’s Hugo RAS system, now seeking FDA approval for urology procedures, threatens to nibble at Intuitive’s territory. But in Europe, where it launched in 2021, the system remains a phantom-its revenue figures absent from quarterly reports. Perhaps the market, like a cautious surgeon, prefers the familiar.
The Question of Timing
The da Vinci 5 system, launched in March 2024, already casts a long shadow over Medtronic’s efforts. For now, Intuitive Surgical’s moat-built of high switching costs and a labyrinth of training-remains intact. Management forecasts 15.5% to 17% procedure growth this year, a number that glimmers with the optimism of accountants.
Yet the stock trades at 55.3 times forward earnings, a valuation that assumes decades of double-digit growth. Should competitors gain traction, or tariffs tighten further, the market’s faith may falter. But for those with a tolerance for risk, the current dip offers a curious paradox: a chance to buy into a colossus at a moment of quiet introspection.
The market, as always, remains a stage of half-finished plays and unresolved sonatas. Intuitive Surgical’s story is not over, but then, few stories ever are. 🕯️
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2025-09-14 22:19