Billionaire Investor Philippe Laffont Shifts Funds from Super Micro computer to Intuitive Surgical, Backing a Robotics Leader with Explosive Growth
New York, NY – June 13, 2024 – Billionaire investor Philippe Laffont, founder of Coatue Management, recently divested his firm’s stake in Super Micro Computer and concurrently invested heavily in Intuitive Surgical, the pioneer in surgical robotics. This strategic move underscores confidence in Intuitive Surgical’s long-term growth potential, particularly as the company navigates challenges like tariff pressures and emerging competition. Intuitive Surgical’s stock has surged approximately 19,390% since its IPO, demonstrating its remarkable performance over the years.
Intuitive Surgical is best known for its da Vinci surgical system, which has revolutionized minimally invasive surgery. The company’s business model benefits considerably from recurring revenue streams; approximately 84% of total revenue last year originated from recurring sources like instruments and accessories that are replaced with each procedure.
Despite a 26% decline from its February peak,driven in part by concerns over potential tariff impacts,analysts remain optimistic. Management recently adjusted its adjusted gross profit margin expectation to a range of 66% to 67%, a slight dip from last year’s 69.1%, but not a critically important deterrent.
A key competitive factor is the recent launch of the da Vinci 5 system in March 2024. This new system already appears to surpass Medtronic‘s Hugo RAS system, which received FDA request for urology procedures earlier this year. While Medtronic’s Hugo system has been authorized for sale in the European Union since 2021, its revenue contribution remains undisclosed, suggesting limited market penetration. Roughly one-fifth of all procedures performed with da Vinci machines last year were in the urology category.
Looking ahead, Intuitive Surgical is forecasting overall procedure growth of 15.5% to 17.0% for the current year. High switching costs for hospitals are expected to support continued procedure growth for the next decade or two.
Currently, the stock is trading at 55.3 times forward earnings, reflecting investor expectations of sustained double-digit profit growth. While competition from Medtronic or other players could pose a risk, the performance of Hugo in the E.U. suggests these threats are currently limited.
Analysts suggest that, for investors with a high risk tolerance, adding Intuitive Surgical shares to a diversified portfolio could be a strategic move.
Disclaimer: Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley fool recommends Johnson & Johnson and Medtronic and recommends the following options: long January 2026 $75 calls on Medtronic and short January 2026 $85 calls on Medtronic. The Motley Fool has a disclosure policy.
