2 Most Compelling Stocks to Buy for Long‑Term Investors Right Now

The article argues both Intuitive Surgical and Microsoft remain attractive long-term buys despite recent stock underperformance. Intuitive Surgical is still growing revenue and procedure volume, with the da Vinci 5 accounting for almost 54% of placed systems in Q1 and new FDA-cleared indications for da Vinci SP; tariffs remain a headwind. Microsoft says its AI business is now running at a $37 billion annual revenue rate, up 123% year over year, while cloud backlog surged 99% to $627 billion, though heavy $190 billion 2026 capex is a concern.

Analysis

ISRG and MSFT are being discounted for reasons that are real in the near term but likely non-durable relative to their franchise strength. In both cases, the market is punishing visible cost pressure and capex intensity, but the more important second-order effect is that these investments deepen the moat: ISRG through installed-base lock-in and procedural ecosystem expansion, MSFT through distribution of AI across an enterprise stack competitors cannot easily replicate.

For ISRG, tariffs look like a margin headwind today, but they also slow down smaller robotic surgery entrants that lack scale purchasing power and global manufacturing flexibility. The more meaningful driver is utilization: every incremental indication and every new system placed expands the surgeon feedback loop, which should compound switching costs over 12-24 months and make competitive displacement even harder.

For MSFT, the consensus is fixated on capex burden, but that capex is effectively converting operating leverage into strategic leverage. If AI revenue continues to scale at triple-digit rates, the market may be underestimating how quickly monetization offsets spend, especially once inference and copilots spread across the installed enterprise base; the risk is not AI cannibalization, but slower-than-expected conversion of usage into pricing power.

The contrarian read is that both stocks may already be pricing in an overly prolonged margin reset. The cleaner setup is not chasing them outright, but using structured exposure around the next 2-3 quarters: any evidence that tariffs or capex are peaking should force multiple expansion well before full earnings recovery shows up. The main risk is if AI capex stays elevated for longer than expected or if tariffs broaden into a larger procurement drag, which would extend the de-rating into year-end.

Key Decisions for Investors

• Long MSFT on a 6-12 month horizon via call spreads or outright equity; favor pullbacks on any post-capex digestion. Risk/reward skews to upside if AI monetization continues compounding faster than spend, with downside likely capped by enterprise retention and balance-sheet quality.
• Add to ISRG on weakness over the next 1-2 quarters; best entry is during tariff-driven margin compression, not after the move has already reversed. The thesis is a 12-24 month multiple re-rating as procedure growth and new indications reaccelerate.
• Pair trade: long MSFT / short a basket of AI-enablers with weaker pricing power if AI capex concern re-surfaces. This isolates the name that owns distribution and monetization rather than the vendors exposed to capex cyclicality.
• For more convex exposure, use ISRG Jan-2027 bull call spreads. The catalyst is not a single quarter but cumulative evidence of expanding installed base and utilization, which should compress implied skepticism over time.
• Avoid shorting either stock outright; the better expression of caution is to wait for higher valuations after the next earnings print, then hedge with calls rather than betting on outright fundamental deterioration.