The R&D Index for the week ending May 24, 2019 closed at 4,549.64 for the 25 companies in the R&D Index. The Index was down -2.28% (or 106.07 basis points) from the week ending May 17, 2019. Ten of the 25 R&D Index members gained value from 0.13% (Toyota) to 5.83% (Novartis). Fifteen of the 25 R&D Index member lost value from -0.09% (Bristol-Myers Squibb) to -18.76% (Qualcomm).
R&D Index member Qualcomm fell sharply last Wednesday after a U.S. district court ruled in favor of the Federal Trade Commission in its antitrust lawsuit against Qualcomm. Apple and Qualcomm settled their licensing lawsuit in late April, however the FTC lawsuit covered many of the same issues stating that Qualcomm used its strong position in the wireless chip market to charge excessive royalties for its patents, thereby unlawfully hurting competition. The judge ordered Qualcomm to renegotiate its licensing agreements. Qualcomm is appealing the judgement. The company’s stock was down nearly 19% for the week, but is still up 16% for the year.
A recent study by the Harvard Business Review (HBR) revealed that corporate R&D spending now dramatically outpaces corporate advertising spending by a factor of 10 to one. In the 1970s, R&D and advertising levels as a function of company expenses were about the same. In the late-1990s, corporate R&D declined to about 8%, but since then has steadily increased to more than 14%. HBR studied more than 33,000 unique companies from 1975 to 2017 in their report.
On June 10, Ford Motor Co. is scheduled to inaugurate its new R&D center in Tel Aviv, Israel, which will be dedicated to autonomous driving and other advanced automotive technologies. In January, Ford committed $11 billion in investments by 2022 to have 40 gas-electric hybrid and 22 battery-powered fully electric vehicles in its model lineup. The company has also committed to introduce a fully autonomous vehicle by 2021.
A report in the Wall Street Journal last week noted that the Commerce Department has sharply slowed approvals over the past year by U.S. semiconductor companies to hire Chinese nationals for advanced engineering jobs. While approvals in 2018 often took several weeks, today those same approvals are now taking six to eight months. From 2013 to 2017, Chinese nationals accounted for more than 60% of approved employment licenses from the Commerce Department.
| R&D Index Week Ending May 17, 2019 |
| Ticker | Exchange | 2018 R&D millions U.S. $ | 05/17/19 | 05/24/19 | 5/24/19 to 5/17/19 | 5/24/19 to 12/31/18 | ||
| 1 | Amazon | AMZN | NASDAQ | 26,750 | 1,869.00 | 1,823.28 | -2.45% | 21.39% |
| 2 | Alphabet/Google | GOOGL | NASDAQ | 18,796 | 1,168.78 | 1,138.61 | -2.58% | 8.96% |
| 3 | Apple | AAPL | NASDAQ | 14,037 | 189.00 | 178.97 | -5.31% | 13.46% |
| 4 | Intel | INTC | NASDAQ | 13,702 | 44.89 | 44.57 | -0.71% | -5.03% |
| 5 | Microsoft | MSFT | NASDAQ | 13,558 | 128.07 | 126.24 | -1.43% | 24.29% |
| 6 | Roche Pharm | RHHBY | OTC | 12,284 | 32.84 | 34.00 | 3.53% | 9.40% |
| 7 | Johnson & Johnson | JNJ | NYSE | 11,493 | 138.61 | 138.85 | 0.17% | 7.59% |
| 8 | Merck & Co. | MRK | NYSE | 11,323 | 78.72 | 81.17 | 3.11% | 6.23% |
| 9 | Volkswagen AG | VWAGY | OTC | 10,915 | 16.60 | 16.18 | -2.53% | 3.72% |
| 10 | Toyota | TM | NYSE | 10,848 | 118.40 | 118.55 | 0.13% | 2.13% |
| 11 | Novartis | NVS | NYSE | 8,934 | 82.70 | 87.52 | 5.83% | 1.99% |
| 12 | Honda | HMC | NYSE | 8,180 | 25.63 | 25.44 | -0.74% | -3.82% |
| 13 | Pfizer | PFE | NYSE | 7,942 | 41.47 | 41.95 | 1.16% | -3.89% |
| 14 | Daimler | DDAIY | OTC | 7,615 | 59.50 | 53.30 | -10.42% | 1.00% |
| 15 | General Motors | GM | NYSE | 7,278 | 37.00 | 35.12 | -5.08% | 4.99% |
| 16 | Oracle | ORCL | NYSE | 7,001 | 54.50 | 52.77 | -3.17% | 16.88% |
| 17 | Bristol-Myers Squibb | BMY | NYSE | 6,981 | 46.85 | 46.81 | -0.09% | -9.95% |
| 18 | Eli Lilly Co | LLY | NYSE | 6,769 | 116.01 | 116.79 | 0.67% | 0.92% |
| 19 | GlaxoSmithKline | GSK | NYSE | 6,394 | 39.46 | 40.18 | 1.82% | 5.16% |
| 20 | Cisco | CSCO | NASDAQ | 6,009 | 56.35 | 54.37 | -3.51% | 25.48% |
| 21 | IBM | IBM | NYSE | 5,842 | 134.32 | 132.28 | -1.52% | 16.37% |
| 22 | Bayer AG | BAYN | OTC | 5,743 | 15.83 | 15.18 | -4.11% | -13.60% |
| 23 | Astra Zeneca PLC | AZN | NYSE | 5,483 | 37.78 | 39.02 | 3.28% | 2.74% |
| 24 | Qualcomm | QCOM | NASDAQ | 5,183 | 81.50 | 66.21 | -18.76% | 16.36% |
| 25 | Sanofi SA | SNY | NYSE | 4,694 | 41.90 | 42.28 | 0.91% | -2.60% |
| Total | 243,754 | 4,655.71 | 4,549.64 | -2.28% | 12.97% | |||
| Biopharmaceutical | 672.17 | 683.75 | 1.72% | 1.92% | ||||
| Automotive | 257.13 | 248.59 | -3.32% | 1.74% | ||||
| ICT | 1,857.41 | 1,796.02 | -3.31% | 11.54% | ||||
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 2017 were selected based on the latest listings from Schonfeld & Associates’ June 2018 R&D Ratios & Budgets. These 25 companies include pharmaceutical (11 companies), automotive (5), ICT (8) and conglomerate (1) organizations who invested a cumulative total of more than $209 billion in R&D in 2017, or approximately 10% of all the R&D spent in the world by government, industries and academia combined, according to R&D Magazine’s 2019 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.
