Check Out Which 'Magnificent Seven' Company Spends the Most on Research and Development
Over the last five quarters, tech giants are investing heavily in R&D on the heels of AI disruption and the rapid speed of innovation. As these technologies become more pervasive in our daily lives, so too has investment in R&D across major companies.
This graphic shows the scale the 'magnificent seven' companies are spending on R&D:
$Amazon(AMZN.US$ invested over $21 billion in R&D the latest quarter, more than double the levels seen at $Meta Platforms(META.US$ or $Apple(AAPL.US$. The company's R&D spending maintained high as it invested in technology infrastructure that underlies everything from software to autonomous vehicles.
Facebook parent Meta spent almost a third of its quarterly revenues on R&D, the highest proportion across the seven companies. The majority of these investments were through its research arm, Reality Labs, which is focused on building a metaverse. However, the company has since pivoted away from its work on the metaverse due to a lackluster response—instead focusing on generative AI.
Chipmaker $NVIDIA(NVDA.US$ has seen its market capitalization skyrocket in 2023. Over the past five quarters, Nvidia's RORC has been rapidly increasing, with a high of 4.54X in the third quarter, placing other tech giants at the top of the list. $Microsoft(MSFT.US$, on the other hand, has been steadily rising and ranked second in the third quarter at 4.04X. This may also indicate the enormous commercial profits brought about by the wave of AI.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Ritz74 : The inverse relationship between R&D as % of Revenue and Return on Research Capital is so stark and marked!
FearGreed : Interesting. RORC calculation must be dependent on the implicit assumption how long it would take for R&D spending to pay off. Not all such spending has the same payoff period.