The R&D Index for the week ending April 20, 2018 closed at 4,129.96 for the 25 companies in the R&D Index. The Index was up 2.56% (or 103.26 basis points) from the week ending April 13, 2018. Nine R&D Index companies gained value last week from 0.33% (Oracle) to 6.76% (Amazon). Sixteen R&D Index companies lost value last week from -0.64% (Intel) to -12.75 (Bristol-Myers Squibb).
R&D Index member Johnson & Johnson announced higher than expected sales for its latest quarter last week and increased its sales outlook for the rest of the year. The company also stated that it would cut costs by between $600 and $800 million by 2022. To make these changes, J&J will take a charge of $1.9 to $2.3 billion over the next several years. The company also stated that it would invest more than $30 billion in R&D over the next three years, with the new tax laws being responsible for most of that increase. J&J is expected to spend more than $9.2 billion on R&D in 2018. J&J stock is down more than 9% since the beginning of the year, however analysts expect its sales and earnings to improve through the end of 2018. Analysts also state that J&J is a harbinger for the rest of the health-care industry.
R&D Index member Microsoft announced last week that it was utilizing its one-time competitor Linux operating system, rather than its in-house Windows operating system, to develop a new chip design for its Azure cloud service that it states will make it more competitive with Amazon’s web service. The Linus system allows Microsoft to squeeze all the required code onto the new chip which Windows would not allow. Microsoft engineers added security features to the Linus kernel, code-named Azure-Sphere which is expected to be available by the end of 2018.
It was reported in the company’s 10-K filings that R&D Index member Intel spent $13.1 billion on R&D in 2017, an increase of $358 million over its spending in 2016. Part of this increase was attributed to the company’s acquisition of the Mobileye self-driving car platform, which as an independent company alone spent $65.3 million on R&D. Another part of Intel’s R&D increase was attributed to its development of its upcoming 7-nanometer manufacturing technologies. An offsetting part of Intel’s R&D was its divestiture of the Intel Security Group (formerly McAfee).
R&D Index Week Ending April 20, 2018
| Ticker | Exchange | 2017 R&D billions$ | 04/13/18 | 04/20/18 | 4/20/18 to 4/13/18 | 4/20/18 to 12/29/17 | |
| Amazon | AMZN | NASDAQ | 17,774 | 1,430.79 | 1,527.49 | 6.76% | 30.61% |
| Alphabet/Google | GOOGL | NASDAQ | 15,845 | 1,029.27 | 1,077.32 | 4.67% | 2.27% |
| Microsoft | MSFT | NASDAQ | 13,987 | 93.08 | 95.00 | 2.06% | 11.06% |
| Intel | INTC | NASDAQ | 13,499 | 51.86 | 51.53 | -0.64% | 11.63% |
| Apple | AAPL | NASDAQ | 11,506 | 174.73 | 165.72 | -5.16% | -2.07% |
| Volkswagen AG | VLKAY | OTC | 11,260 | 42.85 | 41.56 | -3.01% | 2.77% |
| Roche Pharm | RHHBY | OTC | 10,174 | 28.20 | 27.74 | -1.63% | -12.16% |
| Toyota | TM | NYSE | 9,170 | 128.53 | 129.23 | 0.54% | 1.62% |
| Johnson & Johnson | JNJ | NYSE | 9,060 | 130.62 | 126.66 | -3.03% | -9.35% |
| Novartis | NVS | NYSE | 7,870 | 81.04 | 77.88 | -3.90% | -7.24% |
| General Motors | GM | NYSE | 7,468 | 38.73 | 37.61 | -2.89% | -8.25% |
| Pfizer | PFE | NYSE | 7,288 | 36.32 | 36.63 | 0.85% | 1.13% |
| Bristol-Myers Squibb | BMY | NYSE | 6,942 | 58.65 | 51.17 | -12.75% | -16.50% |
| Cisco | CSCO | NASDAQ | 6,827 | 43.00 | 44.09 | 2.54% | 15.12% |
| Qualcomm | QCOM | NASDAQ | 6,723 | 55.73 | 51.44 | -7.70% | -19.65% |
| Oracle | ORCL | NYSE | 6,702 | 46.08 | 46.23 | 0.33% | -2.22% |
| Honda | HMC | NYSE | 6,519 | 34.98 | 34.18 | -2.28% | 0.29% |
| Astra Zeneca PLC | AZN | NYSE | 6,363 | 36.32 | 35.34 | -2.15% | 1.84% |
| Merck & Co. | MRK | NYSE | 5,759 | 57.17 | 58.83 | 2.90% | 4.55% |
| Daimler | DDAIY | OTC | 5,084 | 81.09 | 79.95 | -1.41% | -6.63% |
| Bayer AG | BAYN | OTC | 4,880 | 30.09 | 30.44 | 1.16% | -2.09% |
| Sanofi SA | SNY | NYSE | 4,755 | 40.56 | 39.96 | -1.48% | -7.07% |
| IBM | IBM | NYSE | 4,628 | 156.71 | 144.90 | -7.54% | -5.55% |
| GlaxoSmithKline | GSK | NYSE | 4,508 | 40.58 | 40.00 | -1.43% | 12.77% |
| Eli Lilly Co | LLY | NYSE | 4,489 | 79.72 | 79.06 | -0.83% | -6.39% |
| Total | 209,080 | 4,026.70 | 4,129.96 | 2.56% | 8.92% | ||
| Biopharmaceutical | 619.27 | 603.71 | -2.51% | -5.34% | |||
| Automotive | 326.18 | 322.53 | -1.12% | -1.44% | |||
| ICT | 1,650.46 | 1,676.23 | 1.56% | 1.14% | |||
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 2017 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 2017 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 Amazon, Alphabet/Google, Microsoft, Intel, Apple, Volkswagen AG, Roche Pharma, Toyota, Johnson & Johnson, Novartis, General Motors, Pfizer, Bristol-Myers Squibb, Cisco, Qualcomm, Oracle, Honda Motor Company, Astra Zeneca plc, Merck & Company, Daimler, Bayer AG, Sanofi SA, IBM, GlaxoSmithKline and Eli Lilly Co. 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 $4.5 and $17 billion annually on their R&D efforts.
