A revenue miss and weak Q3 guidance has investors talking about the streaming giant. But another stock fell this week for a much flimsier reason.

Intuitive Surgical

I’ve been following Intuitive Surgical (NASDAQ:ISRG) shares for almost as long as I’ve been investing. Put simply, it’s a near-monopoly in a fast-growing industry.

The company makes robotic surgery systems. Its da Vinci platform handles keyhole procedures, while its Ion system performs minimally invasive lung biopsies.

The firm has three big advantages that add up to an enormously strong competitive position:

• First-mover scale: there are over 11,700 da Vinci systems installed worldwide.
• Switching costs: once a hospital installs a system, changing is difficult and expensive.
• Surgeon training: clinicians who have been trained on da Vinci systems have little incentive to learn a new one.

The business model’s a bit similar to Rolls-Royce. The real value driver isn’t the machines themselves, but everything that comes after – instruments, accessories and servicing.

Why it’s suddenly cheap

The reason I’ve been watching – rather than buying – this stock for ages is that the firm’s obvious strengths have meant shares have been expensive. But that’s changed.

Q2 results landed on 16 July. Revenues and earnings were ahead of expectations, margins increased, and the number of placements (setups for procedures) increased 18%.

Despite this, the stock still fell 11%. The main reason is that management left guidance for the full-year intact (despite Q2 sales coming in ahead of expectations).

That suggests the company isn’t actually doing better than expected – it’s just that growth’s showing up sooner than expected. But is that a reason for the stock to go down?

The share price had already fallen almost 30% since the start of the year. And the result is that the stock’s trading at some unusually low multiples at the moment.

The contrast with Netflix

Here’s the important contrast with Netflix. The streaming company disappointed investors because growth is genuinely slowing. On top of this, there are some worries about engagement. The falling share price might be an overreaction, but there are real signs of slowing in the numbers.

With Intuitive, the firm left guidance intact. There’s a risk worth taking seriously, which is that the likes of Johnson & Johnson, Medtronic, and Stryker are all launching robotic systems.

More competition is unwelcome and could eventually create pressure on margins. But the firm’s key strengths should give it the ability to fend this off for some time.

In the short term, Intuitive Surgical is introducing use-based leasing, in place of selling systems up front. It puts pressure on immediate cash flows, but it reinforces the firm’s long-term strength.

Time to buy?

Intuitive Surgical’s shares are down. But this looks more like a premium valuation contracting than the underlying business deteriorating.

The fundamentals don’t seem to have cracked – it’s just that the multiple’s come down. As a result, I’m looking to take my chance to buy a stock I’ve been following for some time. 

The big question for me is what to sell to make room? That’s what I’ve been thinking about this weekend.

Should you invest £5,000 in Intuitive Surgical right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Intuitive Surgical made the list?

Stephen Wright owns shares in Netflix.

The post Forget Netflix? The stock market’s real bargain might be elsewhere appeared first on The Twelfth Magpie.

To be fair, those sorts of returns from index funds in the space of six months are still pretty impressive. But it’s hard for me not to smile at earning more than double. So, how did I do it?

The strategy that’s driving my returns

These gains haven’t been achieved by chasing speculative penny stocks. Instead, they come as a result of prudent risk management in the second half of 2025.

As valuations ran ahead of fundamentals in several of my favourite holdings, including Shopify, I made the deliberate decision to trim positions and raise cash. It wasn’t that I’d lost faith in those businesses. I simply recognised that some of them had become too expensive to justify holding at full weight.

That discipline paid off when markets sold off sharply at the start of 2026. A panic-driven rotation out of SaaS and high-growth technology stocks gave me the buying opportunity I’d been waiting for.

I promptly redeployed cash into names I knew well and already owned, including CrowdStrike, Datadog, Axon Enterprises, and Cellebrite. And even Shopify ended up back on the buy list after a more reasonable price emerged.

Since then, most of these investments have rebounded sharply and, in turn, my ISA has followed.

My next tempting idea

Out of all the US stocks in my ISA, Intuitive Surgical (NASDAQ:ISRG) is among the more interesting right now.

As a quick introduction, Intuitive Surgical is the world’s leading robotic surgery company. Through its flagship da Vinci surgical systems and its Ion endoluminal platform for lung biopsies, the firm has quietly built one of the most defensible businesses in the world. And the latest quarterly results seem to reflect that.

Through its razor-and-blade business model, management has crafted a powerful growth flywheel that keeps existing customers coming back for more. And by leveraging the organic pricing power this provides, revenue across the first quarter of 2026 climbed 23% to $2.77bn.

Digging deeper, it’s da Vinci procedures grew 16%, Ion procedures surged 39%, and the installed base of its systems expanded 12% to 11,395 globally.

In other words, not only is Intuitive selling more machines, its customers are using them more as well, pushing earnings to come in ahead of analyst expectations.

Yet despite all this business momentum, the shares are still down 24% since the start of the year. Why?

With the bulk of its consumable instruments and accessories manufactured in Mexico, US tariffs are adversely pressuring margins. And when the company announced it had suffered a data breach in March, investor sentiment continued to sour for a premium-priced stock.

So with that in mind, it’s not too surprising to see the shares suffer.

Time to buy?

The data breach and macroeconomic risk factors can’t be ignored. But overall, I remain optimistic about what the future holds for this industry leader. And with the robotic surgery market steadily starting to disrupt traditional healthcare, today’s share price looks tempting.

That’s why I’m seriously considering buying more in my Stocks and Shares ISA.

Should you invest £5,000 in Intuitive Surgical right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Intuitive Surgical made the list?

Zaven Boyrazian owns shares in Axon Enterprise, Cellebrite, CrowdStrike, Datadog, Intuitive Surgical, and Shopify.

The post My Stocks and Shares ISA is already up 21.1% this year. Here’s how appeared first on The Twelfth Magpie.

Ask a dozen different investors and you may get a dozen different answers – or even more! This is an area that can both be emotive and also highly contested.

In reality, nobody knows for sure when the next crash will be. But history tells us that there will be one, sooner or later.

It can be helpful to know what a stock market can look like up close.

Slow Build Up or Sudden Plummet

A stock market crash is commonly understood to mean a decline of 20% or more in short order.

Sometimes, that can come more or less out of the blue. The pandemic was an example – even in February 2020 the market seemed to be absorbing news of its growing threat without too much impact, then in March there was a sudden crash.

But sometimes a crash can follow a bubble that builds up over years. In the end, few people deny that there is a bubble (though some always do), but they disagree about when and how it will burst.

Meanwhile, it can keep going for years. The Japanese property boom in the 1980s that fuelled a rampant stock market and subsequent crash is an example.

When people – including some very smart people – say that you cannot time the market, this can be the sort of situation they are talking about. You may have lots of rational arguments as to why a market is overvalued and you may ultimately be proven right. But trying to time when the drop starts is a mug’s game.

As the Michael Burry character in The Big Short said, “I may be early but I’m not wrong” – to which the response was, “it’s the same thing”.

Not everything moves at once

Typically, even in a sudden crash, not all shares fall as fast or as far.

Some have stronger fundamentals, while some may benefit from investors trying to fish for bargains.

But ultimately, a stock market crash can mean sizeable falls for many companies, even well run ones. For people who have not witnessed a crash before, being involved in it can be scary. That is why having  a plan of action can help.

Here’s my approach

The current market looks frothy in some parts to me. But I am not trying to time the next crash.

However, I am not sitting on my hands. Rather, I am making and updating a list of shares I would like to own if sudden market turbulence makes their price more attractive.

One on my list is Intuitive Surgical (NASDAQ: ISRG).

The robotic surgery specialist has seen its share price fall 26% so far this year. Still, it continues to trade for 51 times earnings.

That is too expensive for me. Although it continues to grow, the company’s strong market position makes it a prime candidate for smaller, newer firms to try and attack.

Still, Intuitive’s proven business appeals to me. Its market is large and resilient. Thanks to its proprietary technology and deep library of past surgical procedures, it has a strong advantage over rivals.

Plus, not only does it make money from machines, but each operation also involves it selling peripherals like sterile attachments.

Should you invest £5,000 in Intuitive Surgical right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Intuitive Surgical made the list?

Christopher Ruane does not hold positions in any of the companies mentioned.

The post What do the early stages of a stock market crash look like? appeared first on The Twelfth Magpie.

That, however, isn’t true across the board. And it’s a mistake to think that discounted prices means lower quality.

Robotics

Robotics is a big theme for investors at the moment. And one of the leaders in the field is Intuitive Surgical (NASDAQ:ISRG).

As the name suggests, the firm’s products are surgical robots. There are four reasons why this one’s on my radar:

• It’s a leading business in a growing industry.
• It’s protected by high switching costs.
• Its unit economics are extremely attractive.
• The stock is unusually cheap. 

Together, I think these make a compelling case to at least look at the stock.

A growing industry

Whatever robots do in the future, they’re already having a big effect on surgical procedures. And this benefits both surgeons and patients.

Despite this, around 80% of procedures are still done manually. That means there’s still a long way to go in terms of market penetration.

Intuitive Surgical has a near-monopoly on robotic surgery. And this position is extremely difficult for competitors to disrupt.

With many surgeons trained on its system, hospitals have a strong incentive to prefer it. The same is true in reverse for surgeons looking for places to work.

This makes breaking Intuitive Surgical’s monopoly extremely tough. And in a growing industry, that’s an extremely attractive position.

Unit economics

Intuitive Surgical consistently maintains gross margins above 66%. That’s extremely high, but it shouldn’t be a big surprise.

Source: Fiscal.ai

An installed base of equipment brings high-margin revenue. This includes ongoing servicing and replacement parts, but there’s something else.

Software stocks have been under pressure recently. But Intuitive Surgical’s simulation software is integrated into its hardware.

I think that’s an extremely attractive feature. And it’s one that’s very easy to miss in what looks like — and is — primarily a hardware business.

The company’s attractive margins are important for another reason. I think they give it a key advantage in tackling the biggest risk it currently faces.

The big risk

Intuitive Surgical’s equipment is expensive. That makes it vulnerable if – or when – budgets come under pressure or face uncertainty.

This has been an issue recently. The company, however, has been making moves to make it easier for customers to install new systems.

Rather than demanding millions of dollars up-front, it’s been offering a pay-as-you-go structure. That reduces the risk of under-utilisation for customers.

Instead, it transfers the risk to Intuitive Surgical. But the company’s size and scale mean it’s in a better position to handle that risk than its rivals.

As a result, it strengthens the firm’s competitive position even further. Offering more attractive terms helps increase the installed base of systems.

Valuation

I’ve had my eye on Intuitive Surgical for some time, but the stock hasn’t really looked cheap to me. Until now.

Source: Fiscal.ai

Based on next year’s earnings, shares are trading at a price-to-earnings (P/E) ratio of 35. The last time they were this cheap was in 2020.

That was during Covid-19 – when surgical procedures were getting cancelled. Are things really that bad right now?

I doubt it. And that’s why I think this might be an unusually good time to take a look at a high-quality stock.

Should you invest £5,000 in Intuitive Surgical right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Intuitive Surgical made the list?

Stephen Wright does not own shares in any of the companies mentioned.

The post Is now a good time to buy robotics stocks? appeared first on The Twelfth Magpie.

In other words, it’s focused on applying AI to the physical world in the form of robotaxis and humanoid robots. The company says these will “build a world of amazing abundance“.

Whether you believe that or not, it can’t be denied that this is a truly massive future market. Why else would Tesla still have a massive $1.37trn market-cap despite falling automotive sales and profits? The potential’s undeniable.

Here then, I want to highlight two exciting robotics stocks not named Tesla that I think are worth considering.

Intuitive Surgical

Let’s start with Intuitive Surgical (NASDAQ:ISRG), the global leader in robotic-assisted surgery. Its da Vinci systems help surgeons perform minimally invasive operations with greater precision and control. They’re incredible machines.

However, the stock’s fallen 25% year to date due to tariff uncertainty (it manufactures in Mexico), rising competition, and the tragic death of a patient during surgery. The latter relates to incomplete staple lines, which the firm’s dealing with via product recalls.

Obviously, this presents reputational risk and is something I’ll be watching closely. However, I think this also presents a potential buying opportunity to consider for a couple of reasons.

First, the company continues to put up impressive numbers. In Q1, worldwide procedures (both da Vinci and Ion, its robot primarily used for the early detection and biopsy of lung cancer) increased by 17%. Revenue jumped 23% to $2.77bn.

Next, the installed base continues to grow, reaching 11,395 da Vinci and 1,041 Ion systems. This increases the company’s moat because there are incredibly high switching costs (hospitals are reluctant to scrap proven systems and retrain staff).

What’s more, Intuitive’s recurring profitable revenue continues to compound (the machines need a constant supply of new parts to work hygienically and safely). This reached 86% of total revenue in Q1.

Finally, after the fall, the stock’s trading at 40 times forward earnings versus a historical average of 57. Not cheap, admittedly, but better value than some time.

Looking ahead, an ageing global population and further expansion into general surgery (hernia repairs, etc) should support robust long-term growth.

XPeng

Next, I want to highlight XPeng (NYSE:XPEV), a Chinese EV company that’s pivoting to driverless taxis and humanoid robots (sound familiar?).

Earlier this week, we got Q1 results and they were a bit mixed. Revenue declined 17.6% to RMB13bn ($1.89bn), while vehicle deliveries dropped 33.3% to 62,682. There was also a narrow net loss (unprofitable firms obviously add risk).

On the plus side, a gross margin of 20.6% was a massive jump from 15.6% the year before. This shows XPeng is successfully cutting manufacturing costs. And it’s just launched the XPeng GX, a new tech-heavy SUV, which is selling like hotcakes.

Looking further out though, it’s the robotics opportunity that appears intriguing. XPeng’s reiterated its goal to begin mass production of its cutting-edge IRON robot by the end of 2026.

These humanoids will then be deployed as sales reps in its vehicle showrooms next year, before global exports begin.

Unlike Tesla, XPeng looks cheap, trading at just 1.4 times sales. It also ended Q1 with $6.1bn in cash.

Should you invest £5,000 in Intuitive Surgical right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Intuitive Surgical made the list?

Ben McPoland owns shares of Intuitive Surgical.

The post 2 top AI robotics stocks to consider above Tesla appeared first on The Twelfth Magpie.

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.

The post If the stock market crashes in 2026, there’s 1 S&P 500 stock I’ll buy appeared first on The Twelfth Magpie.

Market leader

Intuitive Surgical (NASDAQ: ISRG) is a stock I’ve owned for years. The company pioneered the field of robotically-assisted surgery with its flagship da Vinci system. According to various sources, it commands an estimated 60% share of the global robotic surgery market.

Compared to traditional surgery, this method often leads to shorter hospital stays, reduced pain, and faster healing due to smaller incisions and enhanced control systems. The robotic arms filter out a surgeon’s natural hand tremors. 

An increasing number of hospitals now lease rather than buy systems outright. But either way, they still pay for the disposable instruments needed to operate them. This razor-and-blades model generates sticky, recurring revenue. Indeed, 84% of the firm’s $8.35bn in revenue last year was recurring (including operating leases).

Moreover, once surgeons are trained, hospitals tend not to switch, giving Intuitive a wide moat (high switching costs).  

Tariff headaches

However, these wide-moat shares usually command a high premium. And that’s why I tend to wait patiently for rare dips in Intuitive Surgical’s share price to add to my position. 

As such, a 26% drop since February has caught my eye. Buying on these types of dips has worked out well for investors in the past. 

But why is the stock down? It’s mainly due to tariffs, as the company manufactures in Mexico. During a recent healthcare investor event, management said it expects a 100 basis point margin hit this year. But it could be higher in 2026, assuming nothing changes.

The sweeping tariffs are obviously a nightmare for lots of companies. Adding to the confusion is whether they’re even legal, with US courtroom battles ongoing.

Management confirmed it has things to mitigate any future impact, including price increases as a last resort. Over the medium term, it’s targeting a 70% gross margin, up from a forecast 66% this year. But clearly on-off tariffs are an ongoing challenge.

Watching closely

According to Yahoo Finance, the stock’s five-year price-to-earnings-to-growth (PEG) ratio is 2.7. While that’s above the conventional benchmark for perceived fair value (1), it’s a significant discount to previous years. 

Perhaps that’s warranted given the uncertainty, but it doesn’t really change the longer-term outlook for me. The global robotic surgery addressable market remains very large, with both volume and type of procedure likely to grow significantly.

In Q2, worldwide da Vinci procedures increased 17% year on year, with 10,488 systems installed globally (up 14%). 

Meanwhile, the firm has launched the fifth generation of its da Vinci surgical system. With 10,000 times the computing power of previous models, this has advanced artificial intelligence (AI) capabilities, including processing real-time data to give surgeons AI-driven insights during procedures.

Admittedly, the stock isn’t anywhere near bargain territory yet. But Wall Street does have a 12-month price target of $593, which is 31% higher than the current $453 share price.

I’m watching it closely. If Intuitive Surgical falls towards $400, then I will buy a few more shares. Investors looking for a leading robotics stock might want to take a closer look themselves.

The post 1 top S&P 500 stock on my ISA radar appeared first on The Twelfth Magpie.

In the last five years, passive index fund investors have earned a 110% return. That’s a 16% annualised gain versus the usual 10% investors have come to expect. Those are some pretty phenomenal gains. And it’s more than enough for a 50-year-old who’s just started saving for retirement to build a sizable nest egg.

Estimating retirement wealth

Let’s assume an investor has just turned 50. They intend to retire at the age of 67, and through no fault of their own, they currently don’t have any retirement savings. With £500 to spare each month, they decide to drip feed their money into an S&P 500 index fund. So how much money can they expect to have 17 years from now?

If the S&P 500 continues to outperform at 16%, a portfolio could reach as high as £521,600. That’s a pretty nice chunk of change. But if the index reverts back to its usual long-term trajectory, this pile could shrink to £266,100.

In practice, the latter seems more likely. Maintaining a 16% annualised gain is a pretty challenging task. And with most of the recent growth driven by cyclical spending, it’s likely prudent to take a more conservative view. Still, having just over a quarter of a million pounds in the bank is nothing to scoff at.

But what if we really want to keep that 16% gain? There are never any guarantees when it comes to investing. But when executed intelligently, stock picking can deliver such gains.

Moving beyond index funds

Stock picking‘s inherently more risky than relying on index funds. Apart from having to spend a lot of time analysing companies to discover which ones are duds, missing out on opportunities can result in substantial opportunity costs. And that can leave a custom portfolio to lag indices like the S&P 500.

Yet, for prudent and dedicated investors who discover the right opportunities, the rewards can be enormous. Take Intuitive Surgical (NASDAQ:ISRG) as a prime example. The healthcare technology company is the global leader in robot-assisted surgeries, operating with a highly profitable razor-and-blade business model. 

By offering its machines at a low margin to hospitals and then selling consumable components like scalpels at a high margin, the firm has become highly cash generative. And over the last 17 years, that’s translated into an average annualised return of 18.6% — enough to build a £711,350 retirement portfolio.

Taking a step back

Not every individual S&P 500 stock has outperformed, with plenty of promising enterprises failing to meet expectations. And despite being one to consider and a global industry leader, Intuitive Surgical has risks to take into account. Management’s warned of margin pressure on the back of US tariffs as well as a slight slowdown in procedure growth, potentially caused by rising competition.

Needless to say, if new market entrants are able to deliver a cheaper alternative to cash-strapped hospitals, Intuitive’s grip on the robotic surgery market might start to weaken. Nevertheless, I remain optimistic. And it goes to show that with the right businesses, a stock-picking strategy can potentially deliver superior returns.

The post If a 50-year-old puts £500 a month into the S&P 500, here’s what they could have by retirement appeared first on The Twelfth Magpie.

With a plethora of index trackers available, a UK investor could buy into the S&P 500 easily enough. Exchange rate moves and tracker fund fees could mean that the actual return in sterling over the past five years would have been somewhat different to the 97% index growth.

Still, it has got me thinking: could now be the moment for me to add an S&P 500 index tracking share to my portfolio?

Not looking cheap

On balance, I do not think so. Currency moves in recent months have damaged the value of my existing US investments. I see a risk that unpredictable exchange rate movements could continue to be a feature of the US economy in coming years.

If the S&P 500 does well enough, however, that should come out in the wash – I could still be ahead. On top of that, while currency moves sometimes work against an investor’s favour, they sometimes actually help the total return.

My main concern about investing in the S&P 500 right now is a simple one of valuation. With a price-to-earnings (P/E) ratio of 29, the key US share index looks expensive to me. At the moment, by contrast, the FTSE 100 index has a P/E ratio of around 13.

Getting the right balance

In a way, that is not surprising. Some shares in the S&P 500 look very overvalued to me. Then again, they also offer the sort of growth prospects that can be hard to find on this side of the pond.

As an example, consider medical robotics maker Intuitive Surgical (NASDAQ: ISRG).

With a P/E ratio of 79, I think Intuitive Surgical looks badly overpriced. But I thought the same five years ago – and since then, the share has soared 179%. That beats the already impressive performance of the wider S&P 500 during that period hands down.

Why has Intuitive done so well even though I thought the share was already overvalued five years ago?

In short, it has a superb, proven business model. Robotic surgery machines can save healthcare providers costs and cut error rates. They are expensive to buy and once installed, Intuitive also makes money on peripherals such as sterile surgical instrument attachments.

Thanks to its proprietary technology and a large database of previous surgeries, the company has built a strong competitive advantage. Over 17m operations have so far been performed with the company’s flagship product.

Last year, total sales revenue grew 17%, of which 84% is recurring such as peripherals and services.

Clearly this is an exceptionally strong business model. However, does that justify the current market capitalisation of $193bn?

I do not think so. A new chief executive starting tomorrow (1 July) has big boots to fill. Funds have been pouring into AI startups including in the field of robotic surgery. Intuitive has a big lead, but that may decline over time.

Not only do I feel that Intuitive looks overvalued, I feel the same way about the S&P 500 overall at its current level.

So I will not be investing in an S&P 500 tracker, although I will continue to hunt for any individual constituent shares that I think offer me good value.

The post Up 97% in 5 years! Time to invest in the S&P 500? appeared first on The Twelfth Magpie.

Reports say that the administration is looking into ways to remove Powell. As no president has removed a Fed Chair before, more uncertainty is being stirred up for stock investors.

Choppy waters

The S&P 500 has now fallen 16% since mid-February. The way things are going, 20% now looks like a distinct possibility. This would put the index into bear market territory — the first time since 2022.

Nearly half of my Stocks and Shares ISA portfolio in terms of value is made up of S&P 500 stocks. These include Visa, Nvidia, Intuitive Surgical (NASDAQ: ISRG), Uber Technologies, Axon Enterprise, and CrowdStrike.

I’m happy with the quality and resilience of these companies. They all have very strong competitive positions, ranging from digital payments (Visa) and AI chips (Nvidia) to cybersecurity (CrowdStrike) and taxis (Uber).

While a potential recession would knock consumer and business confidence alike, people will still be paying for things via their credit and debit cards and taking taxis. Meanwhile, businesses cannot afford to scrap cybersecurity, especially when hacking incidents are on the rise.

This is important because when a bear market strikes and stocks are falling, I want to have confidence that those in my ISA will likely bounce back when things start improving. And improve they will, as history shows that the S&P 500 has eventually recovered from every previous bear market.

In contrast, if my ISA was stacked with speculative stocks and firms with dubious business models, I would worry about permanent losses. That would make things much more stressful.

Investing during the storm

Recently, I have been buying a small handful of stocks that suddenly fell 25%+. My ISA still has a bit of cash left in it to carry on doing so over the next few weeks.

One stock from the list above that I’ve been waiting to add to for ages is Intuitive Surgical. Through its Da Vinci surgical systems, the company is a global leader in robotic-assisted surgery.

There are around 10,000 Da Vinci machines in hospitals worldwide, and last year surgeons carried out nearly 2.7m procedures with them. Once they are installed and professionals are trained, there are very high switching costs, giving Intuitive a wide moat.

However, there are a couple of specific threats hanging over the firm right now. One is rising competition from medical device giants Medtronic and Johnson & Johnson. Both are hoping to muscle their way into the lucrative robotic surgery space.

Another uncertainty is tariffs, with much of the firm’s manufacturing done in Mexico.

Intuitive’s share price has dipped 23% in three months. However, the forward price-to-earnings ratio here is around 58. That’s about in line with its five-year average but a big premium to the S&P 500 (20). This tells me the stock is not yet on sale.

As it happens, the robotics pioneer reports its Q1 2025 results today. I’ll see what management says and how the stock responds in the next few days before taking another look.

The post My ISA is ready for an S&P 500 bear market appeared first on The Twelfth Magpie.