Finance

Why Intuitive Surgical and Vertex Pharmaceuticals Are Poised for a Rebound

Intuitive Surgical and Vertex, despite setbacks, are seen as growth opportunities due to their market positions and pipelines.

byAndres Castro

October 19, 2025, 9:57 AM

The logo for Vertex Pharmaceuticals is shown on a phone with a financial data background. By Piotr Swat / Shutterstock.com.

Executive Summary

Intuitive Surgical and Vertex Pharmaceuticals have underperformed in the market due to tariffs and clinical setbacks, respectively, but are identified as significant growth opportunities.

Intuitive Surgical maintains a leading position in surgical robotics with its expanding da Vinci system and growing procedure volumes, supported by a strong economic moat and strategies to mitigate tariff impacts.

Vertex Pharmaceuticals’ core cystic fibrosis business remains robust, and the company is diversifying its pipeline with the recently approved non-opioid pain therapy Journavx and promising candidates like zimislecel for type 1 diabetes.

The Story So Far

Intuitive Surgical’s shares have declined due to the initial impact of tariffs on its financial results, while Vertex Pharmaceuticals has faced setbacks from recent clinical trials, contributing to both companies’ market underperformance this year.

Why This Matters

Despite recent market underperformance stemming from tariff impacts on Intuitive Surgical and clinical setbacks for Vertex Pharmaceuticals, both companies are poised for future growth. Intuitive Surgical is expected to leverage its dominant surgical robotics platform, expanding procedure volumes, and strategic options to mitigate tariff effects, while Vertex Pharmaceuticals’ robust core cystic fibrosis business and promising pipeline diversification into non-opioid pain and type 1 diabetes indicate potential for accelerated top-line expansion and recovery.

Who Thinks What?

A Motley Fool analyst identifies Intuitive Surgical and Vertex Pharmaceuticals as significant growth opportunities despite their market underperformance this year.

Intuitive Surgical believes its leading position in surgical robotics, expanding installed base, and strategies to mitigate tariff impacts will drive future growth, leveraging high switching costs and increasing procedure volumes.

Vertex Pharmaceuticals maintains that its core cystic fibrosis business remains strong and expects its diversified pipeline, including new approvals like Journavx and promising candidates such as zimislecel for type 1 diabetes, will accelerate top-line growth despite recent clinical trial setbacks.

Intuitive Surgical and Vertex Pharmaceuticals, two prominent healthcare companies, have experienced market underperformance this year but are identified as significant growth opportunities by a Motley Fool analyst. Intuitive Surgical, a leader in surgical robotics, has seen its shares decline by 16% due to the initial impact of tariffs on its financial results. Meanwhile, Vertex Pharmaceuticals, a biotechnology firm, has faced setbacks from recent clinical trials.

Intuitive Surgical’s Market Position and Growth Drivers

Intuitive Surgical, known for its da Vinci surgical system, maintains a leading position in the surgical robotics sector. The company’s installed base of systems is expanding, a trend bolstered by the introduction of its fifth-generation da Vinci system last year.

A crucial growth driver for Intuitive Surgical is the increasing volume of procedures performed using its devices. These procedures necessitate specialized instruments and accessories that require regular replacement, establishing a consistent and predictable revenue stream for the company. Given the improved health outcomes associated with robot-assisted surgeries, the market for these procedures is considered to have substantial growth potential.

The company also benefits from a robust economic moat, characterized by a significant first-mover advantage and an established ecosystem of clients. High switching costs, encompassing both financial investment and staff training, further deter healthcare facilities from transitioning to competing systems, thus limiting the impact of increased competition.

Regarding the challenge of tariffs, Intuitive Surgical has several strategies to mitigate their impact. These include negotiating with the White House, considering the relocation of manufacturing facilities, or leveraging its pricing power to pass on increased costs to customers.

Vertex Pharmaceuticals’ Expanding Pipeline and Core Strengths

Despite recent clinical setbacks, Vertex Pharmaceuticals’ core business remains strong, driven by its successful franchise of cystic fibrosis (CF) products, which continue to generate increasing sales and profits. The company is actively diversifying its pipeline, a strategy expected to accelerate its top-line growth in the coming years.

Earlier this year, Vertex Pharmaceuticals secured approval for Journavx, a non-opioid therapy for acute pain. This medication is gaining traction with third-party payers in the U.S., offering a potentially safer alternative to opioid-based treatments due to fewer significant side effects.

The company’s investigational therapy for type 1 diabetes (T1D), zimislecel, is another promising candidate in its pipeline. Early clinical trial results indicate that zimislecel can restore insulin production in most patients and significantly reduce or eliminate severe hypoglycemia events. While initially targeting a smaller patient population, zimislecel could represent a major breakthrough in T1D treatment.

Vertex Pharmaceuticals also has several other mid- and late-stage pipeline candidates, alongside Casgevy, an approved therapy for a pair of rare blood diseases. These developments, combined with its strong financial performance, position the company for a potential recovery.

Outlook

Despite their respective challenges this year—tariffs for Intuitive Surgical and clinical setbacks for Vertex Pharmaceuticals—both companies are presented as attractive investment options. Their strong market positions, innovative product pipelines, and strategies to navigate headwinds suggest potential for future growth.