R&D: A long-term investment

The Nasdaq-100's R&D spending is a key differentiator. Companies in this index invest a greater portion of their revenue in R&D than the broader market. This signals a strong commitment to long-term growth and innovation.

Nvidia and Amazon serve as prime examples. Their substantial, ongoing R&D and capital expenditures are fueling advances in AI and cloud computing. While this focus can pressure short-term profits, it builds a foundation for future revenue streams. Investors should monitor how these R&D investments translate into market share gains and sustained competitive advantages.