Intuitive Surgical lowered its outlook for first-quarter revenue following a whopping 60 percent drop in sales of its flagship da Vinci surgical robot system. To CNBC's Jim Cramer, the announcement was a "severe disappointment" that should be a warning sign to investors.
The medical device maker expects revenue of $465 million for the quarter, whereas analysts had hoped for $537.9 million in sales, Reuters reported. A year earlier, Intuitive Surgical reported revenue of $611 million.
Intuitive's problem seems to be rooted in a drop in demand, Cramer said Wednesday on "Squawk on the Street." "I just think that hospitals have spent enough on this stuff."
However, hospitals could simply be waiting to purchase Intuitive's newest product. On Tuesday, Intuitive launched its da Vinci Xi Surgical System in the United States, marking the first upgrade to the system in five years. It remains to be seen how sales fare, but Cramer isn't exactly optimistic.
FDA clears new version of Intuitive's da Vinci surgical robot
"I say stay away from ISRG. It was up all on the hype of the new product," he said. "Maybe, maybe the demand has peaked."
—By CNBC's Drew Sandholm with Reuters.