⚠ Nine Billion Dollars Doing Nothing Is a Question, Not an AssetLow threat

Intuitive Surgical (ISRG) — threat to the moat

The portfolio is 44% of the balance sheet and the reason the reported return on capital looks mediocre.

A large, unlevered cash pile is a defensive asset and an inefficient one, and Intuitive's is now large enough to be a capital-allocation question in its own right.

Return on invested capital, 2025 (%)17.0%As reported~29%Excluding the portfolioThe portfolio is 44% of the $20,458.7M balance sheet, earning a market rate against a 66% gross margin.
The reported return looks mediocre because nearly half the denominator does no operating work. Buybacks have only just begun to shrink the share count, 364.1 million to 357.3 million.

The portfolio was $9.03 billion at the end of 2025 against total assets of $20,458.7 million1 — roughly 44% of the balance sheet earning a market rate of interest rather than the 66% gross margin the operating business earns. It is the single reason the reported return on invested capital, 17.0%2, looks mediocre for a company with these economics; the operating return is nearer 29%3.

Intuitive has begun returning capital, and only recently. It repurchased 4.8 million shares for $2.30 billion in 2025 and 0.9 million for $0.38 billion in the June 2026 quarter4, which has finally started to shrink the count: diluted shares fell from 364.1 million to 357.3 million year on year5. There is no dividend.

The counterargument for holding it is real. Share-based compensation runs at $803 million a year6 and the buyback partly offsets dilution; the leasing book consumes capital; and a device company facing product-liability and field-action risk has reasons to be conservative.

The counter-counterargument is that the shares are about 34% below their high7 and the company is buying back at a rate of roughly 1.4% of the count a year.

Follow the diluted share count. It has now fallen two years running; if it stops falling while the cash pile grows, the buyback is doing nothing but offsetting compensation.

References
  1. ReportedThe portfolio was $9.03 billion at the end of 2025 against total assets of $20,458.7 million — roughly 44% of the balance sheet earning a market rate of interest rather than the 66% gross margin the operating business earns.
    Intuitive Surgical Form 10-K, fiscal year ended December 31, 2025 - Item 7 MD&A, business and operating highlights (3,153,000 da Vinci procedures up 18%, 1,721 placements, an installed base of 11,106, utilisation up about 3%, 870 da Vinci 5 placements, Ion procedures and placements, procedures by region and category, and revenue denominated in foreign currencies) — FY2025 · publ. February 3, 2026 · source ↗
  2. Moat Explorer calcIt is the single reason the reported return on invested capital, 17.0%, looks mediocre for a company with these economics; the operating return is nearer 29%.
    Moat Explorer calculation from Intuitive's SEC XBRL filings (tools_roic_edgar.py): NOPAT divided by average operating invested capital, 17.0% in 2025 - and nearer 29% once the $9.03 billion investment portfolio, which does no operating work, is excluded from the denominator — 2015-2025 · publ. September 2026 · source ↗
  3. Moat Explorer calcIt is the single reason the reported return on invested capital, 17.0%, looks mediocre for a company with these economics; the operating return is nearer 29%.
    Moat Explorer calculation from Intuitive's SEC XBRL filings (tools_roic_edgar.py): NOPAT divided by average operating invested capital, 17.0% in 2025 - and nearer 29% once the $9.03 billion investment portfolio, which does no operating work, is excluded from the denominator — 2015-2025 · publ. September 2026 · source ↗
  4. ReportedIt repurchased 4.8 million shares for $2.30 billion in 2025 and 0.9 million for $0.38 billion in the June 2026 quarter, which has finally started to shrink the count: diluted shares fell from 364.1 million to 357.3 million year on year.
    Intuitive Surgical Form 10-Q, quarter ended June 30, 2026 (installed base 11,710 da Vinci systems up 12%, 468 placements of which 246 were da Vinci 5, the operating-lease share, the distributor acquisitions in Italy, Spain and Portugal, cash and investments of $8.63 billion, and the factors expected to affect future placements) — Q2 2026 and the first six months · publ. July 21, 2026 · source ↗
  5. ReportedIt repurchased 4.8 million shares for $2.30 billion in 2025 and 0.9 million for $0.38 billion in the June 2026 quarter, which has finally started to shrink the count: diluted shares fell from 364.1 million to 357.3 million year on year.
    Intuitive Surgical Form 10-Q, quarter ended June 30, 2026 (installed base 11,710 da Vinci systems up 12%, 468 placements of which 246 were da Vinci 5, the operating-lease share, the distributor acquisitions in Italy, Spain and Portugal, cash and investments of $8.63 billion, and the factors expected to affect future placements) — Q2 2026 and the first six months · publ. July 21, 2026 · source ↗
  6. ReportedShare-based compensation runs at $803 million a year and the buyback partly offsets dilution; the leasing book consumes capital; and a device company facing product-liability and field-action risk has reasons to be conservative.
    Intuitive Surgical Form 10-K, fiscal year ended December 31, 2025 - Item 7 MD&A, business and operating highlights (3,153,000 da Vinci procedures up 18%, 1,721 placements, an installed base of 11,106, utilisation up about 3%, 870 da Vinci 5 placements, Ion procedures and placements, procedures by region and category, and revenue denominated in foreign currencies) — FY2025 · publ. February 3, 2026 · source ↗
  7. ReportedThe counter-counterargument is that the shares are about 34% below their high and the company is buying back at a rate of roughly 1.4% of the count a year.
    Intuitive Surgical (NASDAQ: ISRG) market data, 23 September 2026 - $398.58 a share, market capitalisation $140.81 billion on 353.28 million shares, P/E 46.11, forward P/E 35.59; 52-week high $603.88 (companiesmarketcap: $142.84 billion) — September 2026 · publ. 2026-09-23 · source ↗
Sources
Generated September 23, 2026