The R&D Index: Market Watch for the week ending February 10, 2017 closed at 1,585.83 for the 25 companies in the R&D Index. The Index was up 1.05% (or 16.48 basis points) over the week ending February 3, 2017. Eighteen R&D Index companies gained value last week from 0.50% (Microsoft) to 5.77% (Astra Zeneca). Seven R&D Index companies lost value last week from -0.22% (Merck) to -3.23% (Intel).
Overall stocks rose this week following comments by President Trump on Thursday in a meeting with airline executives stating that he would make an announcement within the next three weeks “that would be phenomenal in terms of taxes” implying a reduction in tax rates. Similarly, yields on U.S. treasury notes also rose in response to the tax rate comments.
R&D Index member Ford Motor Company last week announced that it had acquired majority ownership in Argo AI, an artificial intelligence company founded recently by former Google and Uber leaders who are alumni of Carnegie Mellon’s National Robotics Engineering Center in Pittsburgh. The current team developing Ford’s virtual driver system will be combined with Argo AI’s team to create the virtual driver system for Ford’s SAE Level 4 self-driving vehicles that it expects to market by 2021. Ford also stated that it expects to invest about $1 billion in Argo AI over the next five years to accomplish these tasks. Ford also acquired San Francisco-based private shuttle service Chariot in 2016. R&D Index member General Motors also acquired Cruise Automation for about $1 billion in 2016 for its self-driving development programs.
R&D Index member Honda also announced last week that it will team up with Hitachi’s automotive parts division to build motors for electric vehicles. The firms hope to share R&D costs and produce more efficient components.
R&D Index member Intel noted to analysts on Thursday that it will continue to invest heavily in R&D—its R&D as a percent of revenue in 2016 was 22%, compared to just 16% five years ago in 2011. Intel also stated that it will invest $7 billion over the next several years to complete a fabrication facility in Arizona that was halted in 2014 due to uncertain demand. To keep its leadership role, Intel plans to spend a record $12 billion on capital expenditures in 2017, up 25% from what it spent in 2016.
Many NASA programs are on hold pending the announcement of a NASA administrator and the creation of a government-wide space council chaired by Vice President Pence. Analysts expect an increase in private space funds to be involved in the new policies and in programs that realistically can be completed during President Trump’s current four-year term.
| R&D Index Week Ending February 10, 2017 |
| Ticker | Exchange | 2015 R&D billions$ | 02/03/17 | 02/10/17 | 2/10/17 to 2/3/17 | 2/10/17 to 1/1/16 | ||
| 1 | Microsoft | MSFT | NASDAQ | 12,448 | 63.68 | 64.00 | 0.50% | 15.36% |
| 2 | Intel | INTC | NASDAQ | 12,128 | 36.52 | 35.34 | -3.23% | 2.58% |
| 3 | Roche Pharm | RHHBY | OTC | 10,242 | 29.76 | 30.00 | 0.81% | -12.97% |
| 4 | Toyota | TM | NYSE | 9,112 | 115.12 | 112.89 | -1.94% | -8.25% |
| 5 | Johnson & Johnson | JNJ | NYSE | 9,046 | 113.64 | 115.24 | 1.41% | 12.19% |
| 6 | Novartis | NVS | NYSE | 8,935 | 73.89 | 75.21 | 1.79% | -12.63% |
| 7 | Apple | AAPL | NASDAQ | 8,397 | 129.08 | 132.12 | 2.36% | 25.52% |
| 8 | Pfizer | PFE | NYSE | 7,690 | 32.09 | 32.35 | 0.81% | -0.12% |
| 9 | General Motors | GM | NYSE | 7,500 | 36.33 | 35.17 | -3.19% | 3.41% |
| 10 | Merck & Co. | MRK | NYSE | 6,704 | 64.29 | 64.15 | -0.22% | 21.45% |
| 11 | Ford Motor | F | NYSE | 6,700 | 12.56 | 12.51 | -0.40% | -11.21% |
| 12 | Cisco | CSCO | NASDAQ | 6,411 | 31.32 | 31.51 | 0.61% | 16.02% |
| 13 | Oracle | ORCL | NYSE | 6,042 | 40.43 | 40.79 | 0.89% | 11.66% |
| 14 | Astra Zeneca PLC | AZN | NYSE | 5,997 | 27.92 | 29.53 | 5.77% | -13.02% |
| 15 | Honda | HMC | NYSE | 5,990 | 31.06 | 31.57 | 1.64% | -1.12% |
| 16 | Bristol-Myers Squibb | BMY | NYSE | 5,920 | 50.78 | 51.65 | 1.71% | -24.93% |
| 17 | Qualcomm | QCOM | NASDAQ | 5,833 | 52.98 | 54.00 | 1.93% | 8.04% |
| 18 | Sanofi SA | SNY | NYSE | 5,519 | 40.63 | 42.57 | 4.77% | -0.19% |
| 19 | Eli Lilly Co | LLY | NYSE | 5,331 | 77.23 | 77.79 | 0.73% | -7.76% |
| 20 | GlaxoSmithKline | GSK | NYSE | 5,250 | 39.32 | 40.28 | 2.44% | -0.17% |
| 21 | IBM | IBM | NYSE | 5,247 | 175.82 | 178.68 | 1.63% | 29.87% |
| 22 | Daimler | DDAIY | OTC | 5,169 | 67.65 | 67.12 | -0.78% | -13.84% |
| 23 | Siemens | SIE | XETRA | 4,929 | 118.25 | 119.65 | 1.18% | 33.12% |
| 24 | Bayer AG | BAYN | XETRA | 4,649 | 103.20 | 106.00 | 2.71% | -8.78% |
| 25 | Ericsson | ERIC | NASDAQ | 4,124 | 5.80 | 5.71 | -1.55% | -40.58% |
| Total | 175,313 | 1569.35 | 1585.83 | 1.05% | 4.22% | |||
| Biopharmaceutical | 652.75 | 664.77 | 1.84% | -4.30% | ||||
| Automotive | 262.72 | 259.26 | -1.32% | -7.73% | ||||
| ICT | 529.63 | 536.44 | 1.29% | 20.16% | ||||
About the R&D Index
R&D Magazine’s R&D Index is a weekly stock market summary of the top international companies involved in research and development. The top 25 industrial spenders of R&D in 2015 were selected based on the latest listings from Schonfeld & Associates’ June 2016 R&D Ratios & Budgets. These 25 companies include pharmaceutical (11 companies), automotive (5), ICT (7) and conglomerate (2) organizations who invested a cumulative total of more than $175 billion in R&D in 2015, or approximately 11% of all the R&D spent in the world by government, industries and academia combined, according to R&D Magazine’s 2016 Global R&D Funding Forecast. The stock prices used in the R&D Index are tabulated from NASDAQ, NYSE, XETRA and OTC common stock prices (in U.S. dollars) for the companies selected at the close of stock trading business on the Friday preceding the publication of the R&D Index in R&D Magazine’s R&D Daily eNewsletter.
The companies used in the R&D Index include Microsoft, Intel, Roche Holdings, Novartis, Johnson & Johnson, Pfizer, Toyota Motor, General Motors, Merck & Co., Ford Motor, Cisco, Apple Computer, Sanofi SA, Qualcomm, IBM, Astra Zeneca plc, Honda Motor, Daimler, Oracle, GlaxoSmithKline, Siemens, Eli Lilly Co., Ericsson, Bristol-Myers Squibb and Bayer AG. Stock prices are based on those stocks traded on the U.S. exchanges. R&D Index trends (in the stock prices) are just one indicator of the amount of capital available to these high-technology companies to invest in R&D and should not be implied to indicate the absolute value of R&D investments made by these organizations. The companies chosen for the R&D Index have very large sophisticated internal and global R&D organizations with each company investing between $4.1 and $12.4 billion annually on their R&D efforts.
