Amazon.com may not be a $3 trillion company in the S&P 500 yet. But it's already spending to find the next big thing like one.
The online shopping giant plowed $85.2 billion into research and development in the past 12 months. That's more money spent on R&D than any other company in the S&P 500, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
Amazon.com's big bet on itself is a big part of the reason shares are up more than 30% this year. "Amazon should still be able to grow operating margins while also reinvesting in its business," said CFRA analyst Arun Sundaram.
Outspending On R&D
Amazon's aggressive spending on R&D is a standout. At $85.2 billion in the past 12 months, it's spending nearly twice that of the No. 2 biggest spender, Alphabet.
Meanwhile, Amazon is putting more into the future's potential breakthroughs than all the S&P 500 companies worth $3 trillion or more, individually. Apple spent just $30.3 billion, Microsoft $28.2 billion and Nvidia $9.5 billion.
It's clear Amazon is trying to spend its way back into the AI vanguard.
R&D Race In AI
It's hard to blame Amazon for trying to move into a better position in AI. AI is where the S&P 500's action is.
And it's not alone in the push. Meta Platforms spent less on research than Amazon on a dollar basis in the past 12 months, $37.4 billion. But that's actually 26% of the social media giant's revenue. On that basis, Meta tops Amazon.com's R&D spending at 14.4% of revenue.
"We've seen this many times over the years, with Internet 1.0, then global mobile computing, and now Generative Artificial Intelligence providing the impetus for the unexpected growth which drives stock prices higher," said Nicholas Colas of DataTrek Research.
Biggest S&P 500 R&D Spenders
In past 12 months
| Company | Ticker | R&D spending past 12 months ($ billions) |
|---|---|---|
| Amazon.com | $85.2 | |
| Alphabet | $43.9 | |
| Meta Platforms | $37.4 | |
| Apple | $30.3 | |
| Microsoft | $28.2 | |
| Merck | $18.6 | |
| Intel | $16.3 | |
| Johnson & Johnson | $15.2 | |
| Pfizer | $10.7 | |
| Eli Lilly | $9.9 |
