Apple Stock News: Investing in Research and Development

Apple Stock News

For the latest Apple Stock News, AAPL closed at $113.72 on Friday, October 28th, with a 0.66% loss, or $0.76 from its previous close of $114.48 per share.

Apple stock continues its downward trend after posting a disappointing fourth quarter report on October 25th.  Recently, Apple unveiled the new Macbook Pro in its much anticipated event on October 27th.  However, the event’s anticipation failed to impress shareholders and Apple users.

Apple Stock News

Given these unflattering news, some question Apple’s high research and development (R&D) budget and its return on investment.  Apple spends over $10 billion or 5% of its trailing revenue on R&D.  The company spends about 43% of the companies listed on the S&P 500, according to the Wall Street Journal.  However, if one were to compare Apple with other high-tech companies, its R&D relative to trailing revenue is among the lowest.  For example, Facebook allocates over 20% of its trailing revenue to R&D.  Despite the iPhone’s success as its best selling product, Apple is focusing on diversifying its product.  One is by investing resources and time into its other products and ventures.  Although the new Macbook Pro failed to impress some, Apple plans increase its R&D budget in the future to improve its market share for its other products.

Although we are inclined to see the immediate gains, perhaps Apple’s decision is to focus on its long term goal.  Part of Apple’s long term goal is the completion of Apple’s new 176-acre headquarters dubbed, Campus 2.   The new headquarters will have a separate on-site R&D facilities.  Apple expects to complete construction and relocate over 12,000 employees by late 2016.

Keep checking back for more news regarding AAPL. For Full AAPL forecasts and investment advice by our state of the art algorithm click here.

Comments are closed.