R&D Market Pulse: Investors retreat despite spikes in AI and biotech investments

The R&D World Index plummeted last week, dragged down by significant losses across most of its constituents, despite a surge in AI chip demand and major R&D investments signaling continued industry shifts. The R&D World Index (RDWI) for the week ending November 15, 2024, closed at 3,708.90 for the 25 companies in the RDWI. The Index was down -5.34% (or 209.39 basis points). Four RDWI members gained value last week from 0.36% (Ford Motor Co.) to 3.84% (Bristol-Myers Squibb). Twenty-one RDWI members lost value the previous week from -0.45% (Stellantis NV) to -17.30% (AbbVie).

Technology R&D

AstraZeneca announces major U.S. investment

AstraZeneca, Cambridge, United Kingdom, announced last week the creation of a new R&D center in Kendall Square, Cambridge, Massachusetts. The company also announced the creation of a next-generation manufacturing facility for biologics in Maryland, cell therapy manufacturing capacity on both the East and West coasts of the U.S., and a specialty manufacturing site in Texas. The total capital investment through 2026 was $3.5 billion, with a hiring level of more than 1,000 new highly skilled jobs. These steps are part of the company’s plan to invest $80 billion in the U.S. by 2030. The company has 17,800 employees across 17 R&D, manufacturing, and commercial sites in 12 U.S. states.

AI R&D

Eli Lilly debuts digital health innovation hub in Singapore

Eli Lilly & Company, Indianapolis, Indiana, announced last week a $30 million five-year Digital Health Innovation Hub in Singapore in which the company will deploy its Magnol.AI platform. The platform enables sophisticated and secure ingestion, visualization, and processing of high-frequency sensor data collected using wearable patient sensors. When aligned with clinician and patient-reported outcomes, the product enables real-time data science capabilities critical for digital health technology development with artificial intelligence (AI) driven precision and streamlined efficiency. The data collection is being performed in collaboration with Singapore’s Agency for Science, Technology and Research (A*STAR), which drives AI innovation and adoption in the biomedical sciences sector.

AMD joins Intel in announcing workforce cuts

Advanced Micro Devices, Santa Clara, California, announced last week that it was cutting its global workforce by 4%, which would affect roughly 1,040 workers. A few weeks earlier, RDW Index member Intel, Santa Clara, also announced that it would reduce its workforce by about 16,500, up from a previous target of 15,000. These announcements came just after other sales increases for both companies. Most of their growth was listed as being driven by demand for AI chips and other products for data centers.

In 2024, hardware giants cut more than 20,000 jobs in total.

Nvidia readies humanoid robot technology

AI chip maker Nvidia, Santa Clara, announced last week that its technology for powering humanoid robots would be available in the first half of 2025. Nvidia’s robotic computer, Jetson Thor, will be positioned as a technology provider, much like how Google supplies its Android platform to cellular phone makers. Nvidia says it provides a platform for robots; it is not building a robot. Nvidia, however, also supplies Tesla with the technology to make humanoid robots.

Automotive R&D

GM reduces workforce amid EV market changes

RDW Index member General Motors, Detroit, Michigan, announced last week that it has cut about 1,000 jobs to reduce costs to counter the drop in demand for electric vehicles (EVs). In 2023, the company had reduced its software and services divisions by about 5,000 workers in the form of voluntary buyout offers. VW, BMW, and Ford Motor have all seen drops in quarterly profits and increased competition from Chinese automakers, leading to similar cost-reduction efforts.

Corporate News

U.S. Air Force expands IAC contract

The U.S. Air Force last week added Delta Resources, Kingston, Ontario, General Dynamics Information Technology (GDIT), Falls Church, Virginia, and Modern Technology Solutions Inc. (MTSI), Alexandria, Virginia, to the Pool I awardees on the potential $33.16 billion Information Analysis Center (IAC) multiple award contract to support R&D across the Department of Defense. The work will be performed in various locations and is expected to be completed by September 29, 2027. Delta, GDIT, MTSI, and eight others selected as Pool I companies will compete for IAC task orders.

U.S. Steel takeover faces pushback

The United Steelworkers Union, Pittsburgh, Pennsylvania, Vice President Kamala Harris, President Joseph Biden, and President-Elect Donald Trump have all publicly stated their opposition to the $14.1 billion takeover of U.S. Steel (USS), Pittsburgh, by Nippon Steel, Tokyo, Japan. The deal, first announced at the end of 2023, was opposed by the politicians listed based on national security grounds. The agreement was made based on lower-cost competition between Nippon and USS by Chinese steel suppliers. Deal negotiations over the past year have been stale-mated, with only rare meetings between the deal principals.

 

Foxconn reports strong AI-related growth

Foxconn Technology Group, New Taipei City, Taiwan, announced last week that its third-quarter profits were better than expected thanks to continued high demand for AI-related hardware. Known for assembling iPhones for Apple Computer, Foxconn is increasingly building AI servers for companies like Amazon.com and Nvidia. Foxconn’s AI-server sales grew more than 200% in the first nine months of 2024 and are expected to drive the company’s overall business in 2025. The company’s cloud and networking businesses, which include AI servers, are its second-largest revenue source. Foxconn said its AI-server shipments will grow sequentially in 2025 and account for more than half of its total revenue, an increase from its current 40% level. Demand for Nvidia servers continues to increase, with Foxconn building the world’s largest Nvidia server manufacturing facility in Mexico to meet demand.

Company	Ticker	Exchange	2020 R&D Billions $	11/08/24	11/15/24	11/08/24 to 11/15/24	1/1/22 to 11/15/24
Alphabet/Google	GOOGL	NASDAQ	27.30	179.86	173.89	-3.32%	20.05%
Microsoft	MSFT	NASDAQ	17.20	422.54	415	-1.78%	23.39%
Volkswagen AG	VWAGY	OTC	17.26	9.32	9.13	-2.04%	-68.73%
Apple	AAPL	NASDAQ	18.67	226.96	225	-0.86%	26.71%
Facebook/Meta	META	NASDAQ	13.87	589.34	554.08	-5.89%	64.73%
Intel	INTC	NASDAQ	14.50	26.20	24.35	-7.06%	-52.72%
Johnson & Johnson	JNJ	NYSE	13.75	155.47	154	-0.95%	-9.98%
Roche Holdings AG	RHHBY	OTC	14.14	37.61	35.84	-4.71%	-30.66%
Merck & Co.	MRK	NYSE	11.38	102.92	96.31	-6.42%	25.67%
Novartis	NVS	NYSE	9.39	106.45	103.06	-3.18%	17.82%
Toyota	TM	NYSE	10.72	172.03	172.84	0.47%	-6.72%
Pfizer	PFE	NYSE	8.34	26.72	24.80	-7.19%	-58.00%
Alibaba	BABA	NYSE	6.01	94.10	88.59	-5.86%	-25.42%
GM	GM	NYSE	6.73	55.58	57.04	2.63%	-2.71%
Honda	HMC	NYSE	8.81	26.80	25.82	-3.66%	9.24%
Ford	F	NYSE	9.34	10.97	11.01	0.36%	-46.99%
AbbVie	ABBV	NYSE	13.95	199.50	164.99	-17.30%	21.85%
Sanofi SA	SNY	NYSE	7.75	51.32	47.97	-6.53%	-4.25%
Cisco	CSCO	NASDAQ	6.33	58.06	57.46	-1.03%	-9.33%
Bristol-Myers Squibb	BMY	NYSE	7.13	54.14	56.22	3.84%	-9.83%
Astra Zeneca PLC	AZN	NYSE	6.06	64.49	63.23	-1.95%	8.54%
IBM	IBM	NYSE	5.37	213.72	204.99	-4.08%	53.37%
Oracle	ORCL	NYSE	6.93	189.25	183.74	-2.91%	110.69%
Eli Lilly & Co.	LLY	NYSE	8.61	831.54	746.20	-10.26%	170.15%
Stellantis NV	STLA	NYSE	5.31	13.40	13.34	-0.45%	-31.73%