> world class research arm
Honest question: does Wall Street care? In my experience, this is the kind of thing that’s (rightly or wrongly) considered a “cost center”, not a “profit center”.
Honest question: does Wall Street care? In my experience, this is the kind of thing that’s (rightly or wrongly) considered a “cost center”, not a “profit center”.
In some sense, that is the right move. For example, Intel was a market leader for decades while their research arm was very stagnant for many years too. Other times, it is short sighted not to price in what might be to come because you miss buying shares on the cheap before a huge technology/product leap.
Some people on wallstreet do. In Mckinsey's book Valuation, they make it pretty clear to the reader that companies who spend a lot on r&d tend to have outsized returns compared to their counterparts, who don't spend that much.