The R&D Index for the week ending April 27, 2018 closed at 4,135.15 for the 25 companies in the R&D Index. The Index was up 0.13% (or 5.19 basis points) from the week ending April 20, 2018. Fifteen R&D Index companies gained value last week from 0.09% (Honda) to 4.64% (Eli Lilly Co.). Ten R&D Index companies lost value last week from -0.22% (Roche Pharm) to -4.39% (Alphabet/Google).
The U.S. Dept. of Commerce (DOC) released the first quarter (1Q) report on the U.S. economy last week with U.S. GDP expanding more than forecast at an annual rate of 2.3% for January through March to $17.4 trillion. In the report, the DOC noted that consumer spending (which drives about 70% of U.S. economic output) rose at its slowest pace in nearly five years. Business spending, on the other hand, rose at a 6.1% rate. The Fed expects economic output (GDP) to rise 2.7% in calendar year 2018, while the Congressional Budget Office (CBO) expects U.S. GDP to rise 3.0% in calendar year 2018 and 2.9% in calendar year 2019. Global growth in 1Q was mixed—France, GDP down sharply from 2017; UK, zero GDP growth; Spain, GDP up sharply; Austria, GDP down slightly; and Belgium, GDP down slightly. China’s GDP was up slightly (0.1%) over expectations to 6.8% in 1Q .
R&D Index member Microsoft posted a 35% profit increase to $7.42 billion for its 1Q which was buoyed by growth in its cloud computing business, Azure, which increased 93% in Microsoft’s fiscal third quarter (3Q). The commercial version of its Office 365 online-productivity service (also part of its cloud business) grew 42% in its fiscal 3Q. Microsoft’s results were about 10% higher than analysts’ expectations. R&D Index member Intel also reported that its 1Q profit grew by 50% from a year earlier to $4.55 billion. Intel’s sales of data center equipment to cloud service providers grew by 45% over a year earlier sales.
R&D Index member Google/Alphabet posted a 73% increase in net 1Q profits to $9.4 billion, up from $5.4 billion in 1Q 2017. According to analysts these profits are likely to be invested in Google infrastructure (which the company has being doing) which are critical to maintaining its lead in future technologies, such as in machine learning. The company spent $7.3 billion on capital expenditures in 1Q 2018, more than three times what it spent in 1Q 2017.
The Environmental Protection Agency (EPA) announced last week that it plans to restrict research data used in developing regulations. The new proposal would exclude research studies that don’t make their raw data public and limit the use of the results that cannot be reproduced by others. Scientists claim that this new proposal would weaken the EPA’s ability to consider scientific evidence.
R&D Index Week Ending April 27, 2018
| Ticker | Exchange | 2017 R&D billions$ | 04/20/18 | 04/27/18 | 4/27/18 to 4/20/18 | 4/27/18 to 12/29/17 | ||
| 1 | Amazon | AMZN | NASDAQ | 17,774 | 1,527.49 | 1,572.62 | 2.95% | 34.47% |
| 2 | Alphabet/Google | GOOGL | NASDAQ | 15,845 | 1,077.32 | 1,030.05 | -4.39% | -2.22% |
| 3 | Microsoft | MSFT | NASDAQ | 13,987 | 95.00 | 95.82 | 0.86% | 12.02% |
| 4 | Intel | INTC | NASDAQ | 13,499 | 51.53 | 52.73 | 2.33% | 14.23% |
| 5 | Apple | AAPL | NASDAQ | 11,506 | 165.72 | 162.32 | -2.05% | -4.08% |
| 6 | Volkswagen AG | VLKAY | OTC | 11,260 | 41.56 | 41.05 | -1.23% | 1.51% |
| 7 | Roche Pharm | RHHBY | OTC | 10,174 | 27.74 | 27.68 | -0.22% | -12.35% |
| 8 | Toyota | TM | NYSE | 9,170 | 129.23 | 131.01 | 1.38% | 3.02% |
| 9 | Johnson & Johnson | JNJ | NYSE | 9,060 | 126.66 | 128.27 | 1.27% | -8.25% |
| 10 | Novartis | NVS | NYSE | 7,870 | 77.88 | 77.27 | -0.78% | -7.97% |
| 11 | General Motors | GM | NYSE | 7,468 | 37.61 | 37.65 | 0.11% | -8.15% |
| 12 | Pfizer | PFE | NYSE | 7,288 | 36.63 | 37.00 | 1.01% | 2.15% |
| 13 | Bristol-Myers Squibb | BMY | NYSE | 6,942 | 51.17 | 52.27 | 2.15% | -14.70% |
| 14 | Cisco | CSCO | NASDAQ | 6,827 | 44.09 | 44.71 | 1.41% | 16.74% |
| 15 | Qualcomm | QCOM | NASDAQ | 6,723 | 51.44 | 51.11 | -0.64% | -20.17% |
| 16 | Oracle | ORCL | NYSE | 6,702 | 46.23 | 45.53 | -1.51% | -3.70% |
| 17 | Honda | HMC | NYSE | 6,519 | 34.18 | 34.21 | 0.09% | 0.38% |
| 18 | Astra Zeneca PLC | AZN | NYSE | 6,363 | 35.34 | 35.59 | 0.71% | 2.56% |
| 19 | Merck & Co. | MRK | NYSE | 5,759 | 58.83 | 59.47 | 1.09% | 5.69% |
| 20 | Daimler | DDAIY | OTC | 5,084 | 79.95 | 79.58 | -0.46% | -5.89% |
| 21 | Bayer AG | BAYN | OTC | 4,880 | 30.44 | 29.84 | -1.97% | -4.02% |
| 22 | Sanofi SA | SNY | NYSE | 4,755 | 39.96 | 39.60 | -0.90% | -7.91% |
| 23 | IBM | IBM | NYSE | 4,628 | 144.90 | 146.48 | 1.09% | -4.52% |
| 24 | GlaxoSmithKline | GSK | NYSE | 4,508 | 40.00 | 40.56 | 1.40% | 14.35% |
| 25 | Eli Lilly Co | LLY | NYSE | 4,489 | 79.06 | 82.73 | 4.64% | -2.05% |
| Total | 209,080 | 4,129.96 | 4,135.15 | 0.13% | 9.06% | |||
| Biopharmaceutical | 603.71 | 610.28 | 1.09% | -4.31% | ||||
| Automotive | 322.53 | 323.50 | 0.30% | -1.14% | ||||
| ICT | 1,676.23 | 1,628.75 | -2.83% | -1.73% | ||||
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.
