What explains Stryker's rising R&D expenses in recent quarters?

Stryker's rising R&D expenses in recent quarters can be attributed to several key factors: 1. **Innovation Focus**: Stryker has been focusing on innovation, particularly in areas such as robotics and artificial intelligence for healthcare, as evidenced by its commitment to the expansion of the Mako robotic surgery platform. The company's strong demand for Mako and a healthy order book indicate a strategic emphasis on technological advancements. 2. **Diversified Product Portfolio**: Stryker's broad product range, which includes Mako and products for hip and knee surgeries, suggests a need for continuous research and development to maintain and enhance its market position. This diversification is a key factor in shielding the company from potential sales shortfalls during economic challenges. 3. **Market Positioning**: Stryker's positioning itself for growth as the pandemic subsides, with expectations of higher procedures and an anticipated earnings improvement, likely necessitates increased R&D spending to support product development and market expansion. 4. **Financial Capacity**: The company's financial capacity to support higher R&D expenses is indicated by its market capitalization and earnings yield, which are favorable compared to the industry average. This financial strength likely provides the flexibility to invest more in R&D. In summary, Stryker's rising R&D expenses are a strategic decision driven by its focus on innovation, diversification, market positioning, and financial capacity. These factors collectively position the company for growth and competitiveness in the medical device market.