The effectiveness of R&D spending can be measured in several ways. One is the number of patents filed each year. However, patents do not always produce revenue in and of themselves. IBM filed the most patents in the United States last year, while Apple filed only a fraction of that. Notwithstanding recent developments, Apple has been the more successful of the two by far over the past decade.

Many of the companies wasting the most on R&D are shrinking. One of the best examples is chip maker Advanced Micro Devices. Despite large, ongoing investments in R&D, its revenue has faltered for years, and it often has lost money during this time. AMD continues to make no progress against its primary rival, Intel.

When a company is losing money, particularly if it has a history of losses and minuscule profit margins, that’s a red flag it is not spending its R&D investment wisely.

Outside attempts to change management are often a sign Wall Street believes a company is making poor R&D investments. After accumulating a large position in Forest Labs, Carl Icahn forced the company to add one of his representatives to the company’s board. HP has gone through a series of management and board changes due to broad investor dissatisfaction. Michael Dell, the largest shareholder of Dell, recently offered to buy the entire company, to remove possible shareholder influence.

Some would argue that a company struggling to grow its business actually should spend more money on R&D. HP could spend a lot more on R&D. At just 2.8%, the company spends a tiny portion of its overall revenue. However, almost none of the money spent on R&D in the past has helped it move beyond its unsuccessful legacy businesses, such as PCs and printers, and into the growing market of tablets and smartphones.

To identify the companies wasting the most money, 24/7 Wall St. reviewed the 50 companies on the S&P 500 that spent the most on R&D in fiscal 2012. To reflect the extent to which companies were investing their money poorly, companies with the biggest R&D budgets also had to have net margins of less than 3%.

These are America’s most wasteful companies.

The San Jose Mercury News posted an analysis that shows, among other things, that Hewlett-Packard Co. (NYSE: HPQ) has chopped its R&D budget in recent years. That might be a cause for its terrible financial condition now. However, some companies that have large budgets, and even accelerated R&D investments, have not done much better than HP.

Among those companies that spent a very large amount on R&D compared to their revenues last year are battered Advanced Micro Devices Inc. (NYSE: AMD), Yahoo! Inc. (NASDAQ: YHOO) and Juniper Networks Inc. (NYSE: JNPR).

At the other of the spectrum are companies that spend a very small portion of sales on R&D. These include Apple Inc. (NASDAQ: AAPL), Cisco Systems Inc. (NASDAQ: CSCO) and Oracle Corp. (NASDAQ: ORCL), each of which has to be considered the leader in its sector.

The ready argument about the why R&D investment and success are not linked is that troubled corporations have such pathetic revenue size compared to their rivals, and such little growth, that any expenditure would look large. On the other hand, very large companies that are growing quickly may spend a large amount in actual dollars on R&D, but they are so successful that even these very large investments appear small compared to their massive sales.

The final case about R&D expenditure size is that successful companies can make modest investments because their spending is “smart” while that of troubled rivals is “stupid.” The ultimate proof of that is Apple’s ratio of R&D to sales is very small. But its investment has created products like the iPhone. At the other end of the spectrum, AMD has not come even close to rivaling the market share of Intel Corp. (NASDAQ: INTC) in terms of PC processor sales. Its R&D investments, therefore, have to be misplaced.

The Mercury News quoted one expert whose opinion may be completely wrong because it defies what appears to be a case that R&D as a percentage of revenue may favor companies with low ratios:

“HP is not as competitive as they should be across a lot of their portfolio,” said Baird Equity Research analyst Jayson Noland, “and that absolutely has some correlation to what they spend on R&D.”

In reality, HP may just have placed its R&D bets on products that have taken it in the wrong direction.

Intel Corp. (NASDAQ: INTC) short interest fell 0.2% to 224.42 million shares. About 4.5% of Intel’s float is now short.

Advanced Micro Devices Inc. (NYSE: AMD) saw short interest rose 4.6% to 96.3 million shares, or 15.9% of the company’s total float.

Qualcomm Inc. (NASDAQ: QCOM) short interest fell 4% to 16.29 million shares, which represents 1% of the company’s float.

ARM Holdings PLC (NASDAQ: ARMH) saw a 21.8% drop in short interest to 3.18 million shares, which represents about 0.7% of the firm’s float.

Micron Technology Inc. (NASDAQ: MU) showed a rise of 10% in short interest to 76.43 million shares, or about 7.5% of Micron’s float.

SanDisk Corp. (NASDAQ: SNDK) saw short interest rise 1.6% to 7.59 million shares, or 3.1% of the company’s float.

Short interest in Broadcom Corp. (NASDAQ: BRCM) fell 10.8% to 8.02 million shares. That is 1.5% of the total float.

Marvell Technology Group Ltd. (NASDAQ: MRVL) posted a 23.8% decrease in short interest to 4.79 million shares, or about 1.2% of Marvell’s float.

Nvidia Corp. (NASDAQ: NVDA) short interest rose by a whopping 86.4% to 59.06 million shares, about 10.7% of the company’s float.

Texas Instruments Inc. (NASDAQ: TXN) saw short interest decline by 15.5% to 19.75 million shares, or 1.8% of the float.

Applied Materials Inc. (NASDAQ: AMAT) short interest fell 24.5% to 13.82 million shares, which is about 1.2% of the company’s float.

The Market Vectors Semiconductor ETF (NYSEMKT: SMH) showed a drop of 7.9% in short interest to 7.85 million shares.

Nvidia put up a recent high near $15 on May 21, and shares dropped to a two-week low on May 23. The shares closed at $14.17 last night and a further drop is not out of the question.

The U.S. dollar index is trading down 0.28% today, now at 83.5980. The GSCI commodity index is down 0.1% at 624.91. WTI crude oil closed up 0.9%, at $95.16 a barrel. Brent crude trades up 0.2% at $103.93 a barrel. Natural gas is down 3.3% today at about $3.94 per million BTUs following a larger-than-expected addition to U.S. inventories<<LINK>>. Gold settled down 0.7% today at $1,386.90.

The unofficial closing bells put the DJIA down more than 42 points to 15,233.22 (-0.28%), the NASDAQ fell more than 6 points (-0.18%) to 3,465.24, and the S&P 500 fell 0.50% or more than 8 points to 1,650.47.

There were a several analyst upgrades and downgrades today, including:

• Barrick Gold Corp (NYSE: ABX) was cut to ‘underperform’ at Macquarie;
• Chesapeake Energy Corp. (NYSE: CHK) cut to ‘neutral’ with a $20 price target at J.P. Morgan;
• Constellation Brands Inc. (NYSE: STZ) raised to ‘buy’ with a price target of $64 at Stifel Nicolaus;
• Palo Alto Networks Inc. (NYSE: PANW) raised to ‘overweight’ with a price target of $65 at Morgan Stanley; and
• SunPower Corp. (NASDAQ: SPWR) raised to ‘outperform’ at Cowen Securities.

Earnings reports since markets closed last night have resulted in some price changes for reporting companies as of the last half hour of trading today:

• Dillard’s Inc. (NYSE: DDS) is up 2.6% at $91.36 after posting a new 52-week high of $92.93 earlier today;
• Jack in the Box Inc. (NASDAQ: JACK) is down 4.1% at $36.78;
• Skechers USA Inc. (NYSE: SKX) is down 3.6% at $20.64;
• E Commerce China Dangdang Inc. (NYSE: DANG) is up 5.3% at $5.20;
• Kohl’s Corp. (NYSE: KSS) is up 4.6% at $51.97;
• ReneSola Ltd. (NYSE: SOL) is down 14.5% at $1.89; and
• Wal-Mart Stores Inc. (NYSE: WMT) is down 2.1% at $78.21.

Before markets open tomorrow morning we are scheduled to hear earnings from Autodesk Inc. (NASDAQ: ADSK), Dell Inc. (NASDAQ: DELL), J.C. Penney Co. Inc. (NYSE: JCP), Nordstrom Inc. (NYSE: JWN), and Stage Stores Inc. (NYSE: SSI).

Some standouts among heavily traded stocks today include:

Cisco Systems Inc. (NASDAQ: CSCO) is up 13.1% at $23.98, after posting a new 52-week high of $24.24 earlier today. The networking equipment giant posted strong earnings last night.

National Bank of Greece SA (NYSE: NBG) is up 20.1% at $2.03. The Greek bank’s shares have risen by a third since the country’s sovereign debt rating was upgraded earlier this week.

Advanced Micro Devices Inc. (NYSE: AMD) is down 13.4% at $3.80. The chipmaker’s shares took a beating today after Goldman said that the stock was overpriced.

Stay tuned for Friday. Minneapolis Fed President Narayana Kocherlakota is giving a speech. We have (also) noted the following events on the schedule (all times Eastern):

• 9:55 a.m. – University of Michigan/Thomson Reuters consumer sentiment index
• 10:00 a.m. – Leading indicators

We recently featured AMD in our stocks that analysts expect to double and the issue was the same driving force back then, but in a research report from Wells Fargo. The Open 3.0 servers are supposed to reduce virtual server and desktop costs by 57% when compared to comparable virtual infrastructure.

The question is whether this big move on Monday is really just more and more short covering. The short interest remains high at 96 million shares as of the end of April, but that is within the range of recent bi-monthly reports. We would also point out that the short interest peaked at about 152 million shares in November of 2012.

AMD shares so far on Monday with less than 30 minutes to the closing bell are up about 5.8% at $4.17 on nearly 50 million shares. Its 52-week trading range is $1.81 to $6.89 and the average daily volume is almost 21.5 million shares.

Intel Corp. (NASDAQ: INTC) short interest fell 1% to 233.21 million shares. About 4.7% of Intel’s float is now short.

Advanced Micro Devices Inc. (NYSE: AMD) saw short interest fall by 6% to 96.06 million shares, or 15.9% of the company’s total float.

Qualcomm Inc. (NASDAQ: QCOM) short interest rose by 3.4% to 14.29 million shares, which represents 0.8% of the company’s float.

ARM Holdings PLC (NASDAQ: ARMH) saw a 5.9% rise in short interest to 3.46 million shares, which represents about 0.7% of the firm’s float.

Micron Technology Inc. (NASDAQ: MU) showed a decline of 22.4%% in short interest, to 66.32 million shares, or about 6.5% of Micron’s float.

SanDisk Corp. (NASDAQ: SNDK) saw short interest fall by 16.7% to 7.8 million shares, or 3.2% of the company’s float.

Short interest in Broadcom Corp. (NASDAQ: BRCM) rose by 1.5% to 7.46 million shares. That is 1.5% of the total float.

Marvell Technology Group Ltd. (NASDAQ: MRVL) posted a 2.4% increase in short interest, to 5.6 million shares, or about 1.4% of Marvell’s float.

Nvidia Corp. (NASDAQ: NVDA) short interest rose by 1.8% to 26.52 million shares, about 4.5% of the company’s float.

Texas Instruments Inc. (NASDAQ: TXN) saw short interest decline by 5.9% to 26.5 million shares, or 2.4% of the float.

Applied Materials Inc. (NASDAQ: AMAT) short interest rose by 1.8% to 18.95 million shares, which is about 1.6% of the company’s float.

The Market Vectors Semiconductor ETF (NYSEMKT: SMH) showed a drop of 3.8% in short interest to 9.34 million shares.

Shorts in Texas Instruments got squeezed by the company’s better-than-expected quarterly earnings report and the faint-hearted dropped their positions and likely went looking for a better play.

During the prior two-week period, short sellers added more than 15% to their positions in SanDisk. In the most recent report, more than 16% dropped their short in their short position in the stock. Their timing looks good; SanDisk hit a two-month bottom on May 1 and has been on the rise ever since.

The projection for wirelessly connected devices comes from U.K.-based ABI Research and are part of the firm’s Internet of Everything (IoE) research service. The firm’s practice director said:

The emergence of standardized ultra-low power wireless technologies is one of the main enablers of the IoE, with semiconductor vendors and standards bodies at the forefront of the market push, helping to bring the IoE into reality. … Today, Hub devices such as smartphones, tablets, and laptops are pivotal in enabling the IoE ecosystem and will continue to be an essential building block. Future growth, however, is driven by node or sensor type devices and by 2020 these will account for 60% of the total installed base of devices.

Node and sensor devices typically use low-cost, relatively simple chips capable of doing a single task, like opening your garage door or turning on the furnace as you leave work to return to a nice warm home. The Internet of Everything is really cloud-computing pushed down to the level of devices that are not often thought of as computing machinery.

One of the technologies that is likely to thrive in this brave new world is Bluetooth. Chipmakers like Broadcom Corp. (NASDAQ: BRCM) and Texas Instruments Inc. (NASDAQ: TXN) that already make Bluetooth chipsets and are developing lower power version.

Another contending technology is known as Zigbee and is widely supported in electric utility circles as way to manage a demand-response electricity network. Silicon Laboratories Inc. (NASDAQ: SLAB) uses a Cortex processor from ARM Holdings plc (NASDAQ: ARMH) in its Zigbee products. ARM’s experience with low-power designs will provide yet another edge for the company. Last year Silicon Labs bought Ember, the industry’s leading developer of Zigbee chipsets.

Intel Corp. (NASDAQ: INTC), Advanced Micro Devices Inc. (NYSE: AMD), and Qualcomm Corp. (NASDAQ: QCOM) all make wireless LAN and WiFi chipsets, and while those will remain as the backbone of an IoE system, there will be a lot more IoE node devices than hub devices like laptops. Qualcomm may be furthest ahead in getting into supplying the low-end node processors.

Investors also are finding themselves wondering what to do now that the S&P 500 and the Dow Jones Industrial Average keep hitting new record highs. 24/7 Wall St. has gone through literally hundreds of recent research calls from May and the end of April to find the speculative hidden gems in independent research and in Wall Street research that are calling for expected returns way above market.

Analysts are saying that these stocks could rise by 40%, 50% or even 100%. Our list of 13 fresh analyst stock picks calling for upside of 40% to 100% includes the following: Advanced Micro Devices Inc. (NYSE: AMD), Alliance One International Inc. (NYSE: AOI), Atlas Air Worldwide Holdings Inc. (NASDAQ: AAWW), Boulder Brands Inc. (NASDAQ: BDBD), Carbonite Inc. (NASDAQ: CARB), Chimerix, Inc. (NASDAQ: CMRX), Corning Inc. (NYSE: GLW), Gulfport Energy Corp. (NASDAQ: GPOR), Keryx Biopharmaceuticals Inc. (NASDAQ: KERX), LifeLock, Inc. (NYSE: LOCK), Oasis Petroleum Inc. (NYSE: OAS), Pure Cycle Corp. (NASDAQ: PCYO) and Swift Energy Co. (NYSE: SFY).

We have added color or shown how these calls compare to the consensus price targets from Thomson Reuters to keep things in perspective.

Advanced Micro Devices Inc. (NYSE: AMD) has been on a run, and the stock is threatening to break out of a long-term trading range. Wells Fargo recently maintained its $5 to $7 price range and its Outperform rating when it was talking up the lagging processor designer’s price changes. This still implies that AMD could double in price under the best case scenario from around $3.60 now. This may sound crazy to us, and maybe even to you, but AMD’s 52-week high is $7.32, even if the consensus price target is only about $2.85 here.

Alliance One International Inc. (NYSE: AOI) was just featured in a list of small caps from Deutsche Bank to buy. It provides cigarette manufacturers with the leaf tobacco to make their products. Its consensus price target is $6, which represents implied upside of more than 60% from the current share price around $3.70.

Atlas Air Worldwide Holdings Inc. (NASDAQ: AAWW) rose more than 5% at the start of the week to $44 because Barron’s gave it a writeup showing that it could rise 60% from recent prices. The report showed that cutbacks in military-cargo flights and international deliveries have hurt Atlas Air but its upgraded fleet and more growth elsewhere would drive the value and interest. Barron’s quoted a BB&T Capital Markets analyst calling for $60 on the stock, although it is barely above the consensus price target of $58.44, and one analyst still has an official target price much higher.

The U.S. dollar index is trading down 0.28% today, now at 81.521. The GSCI commodity index is down 0.9% at 624.44. WTI crude oil closed down 2.6%, at $91.03 a barrel, following a massive increase in commercial inventories (more coverage here). Brent crude trades down 2.4% at $99.89 a barrel, as the spread between WTI and Brent now falls below $10 a barrel (more coverage here). Natural gas is down 0.4% today at about $4.32 per million BTUs. Gold settled down 1.8% today at $1,446.20 an ounce.

The unofficial closing bells put the DJIA down about 139 points to 14,700.95 (-0.94%), the NASDAQ about 30 points (-0.89%) to 3,299.13, and the S&P 500 fell -0.93% or nearly 15 points to 1,582.70.

There were a several analyst upgrades and downgrades today, including Biogen Idec Inc. (NASDAQ: BIIB) removed from “Conviction Buy” list and cut to ‘neutral’ at Goldman Sachs; Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) raised to ‘buy’ at Nomura; Berkshire Hathaway Inc. (NYSE: BRK-A) raised to ‘buy’ at Nomura; Amgen Inc. (NASDAQ: AMGN) added to “Conviction Buy” list at Goldman Sachs; and Oil States International Inc. (NYSE: OIS) cut to ‘underperform’ at BMO Capital Markets and cut to ‘market perform’ at Raymond James.

Earnings reports since markets closed last night resulted in some price moves today, including these as of the last half hour of trading: Affymetrix Inc. (NASDAQ: AFFX) is down 8% at $3.35; Bankrate Inc. (NYSE: RATE) is up 14.7% at $15.46; Leap Wireless International Inc. (NASDAQ: LEAP) is down 3.2% at $5.54; Spectrum Brands Holdings Inc. (NYSE: SPB) is down 4.6% at $53.44; Trulia Inc. (NYSE: TRLA) is up 13.1% at $32.86; Vanguard Health Systems Inc. (NYSE: VHS) is down 8.3% at $13.41; ADT Corp. (NYSE: ADT) is down 6.9% at $40.65; Chesapeake Energy Corp. (NYSE: CHK) is down 2.1% at $19.14 (more coverage here); Comcast Corp. (NASDAQ: CMCSA) is up 1.2% at $41.81 (more coverage here); Humana Inc. (NYSE: HUM) is up 4.4% at $77.38; James River Coal Co. (NASDAQ: JRCC) is up 32.8% at $2.19; Mastercard Inc. (NYSE: MA) is down 2.3% at $540.47; Phillips 66 (NYSE: PSX) is down 2.1% at $59.68 (more coverage here); and Viacom Corp. (NASDAQ: VIAB) is up 3.2% at $66.01 after posting a new 52-week high of $69.00 earlier today.

Before markets open tomorrow morning we are scheduled to hear earnings reports from Archer Daniels Midland Co. (NYSE: ADM), Avis Budget Group Inc. (NASDAQ: CAR), CBS Corp. (NYSE: CBS), Facebook Inc. (NASDAQ: FB), JDS Uniphase Corp. (NASDAQ: JDSU), Las Vegas Sands Corp. (NYSE: LVS), Seagate Technology PLC (NASDAQ: STX), Tesoro Corp. (NYSE: TSO), Visa Inc. (NYSE: V), Alpha Natural Resources Inc. (NYSE: ANR), Cigna Corp. (NYSE: CI), Goldcorp Inc. (NYSE: GG), and Monster Worldwide Inc. (NYSE: MWW).

Some standouts among heavily traded stocks today include:

Advanced Micro Devices Inc. (NYSE: AMD) is up 13.1% at $3.19. The chipmaker had no big news today, although it did introduce two new microprocessors and made some pricing changes that indicate that the company’s pricing may have stabilized.

Sirius XM Radio Inc. (NASDAQ: SIRI) is up 3.4% at $3.36 after posting a new 52-week (and 5-year) high of $3.39 earlier today. The satellite radio company posted a second consecutive high today, continuing to feast off yesterday’s earnings report.

Merck & Co. (NYSE: MRK) is down 2.8% at $45.67. The drug maker slid on its lackluster earnings results and took a slice out of its sales and earnings targets for the rest of the year.

Stay tuned for Thursday. We have noted the following events on the schedule (all times Eastern):

• 7:30 a.m. – Challenger job-cut report
• 8:30 a.m. – International trade
• 8:30 a.m. – New claims for unemployment benefits
• 8:30 a.m. – Productivity and costs
• 10:30 a.m. – EIA weekly natural gas storage report
• 4:30 p.m. – Fed balance sheet and money supply

Wells Fargo analyst David Wong wrote that the company debuted two more “FX” series microprocessors and that AMD has also made some changes to its processor pricing list. His current rating outperform and he has a price target range that is still in the $5 to $7 price range from when we asked “Dear Mr. Analyst, Can AMD Really Double?”

What is interesting is that the rise in the price of AMD stock is up 14% at $3.23 and the trading volume is about 4-times normal trading volume. The price cuts on the processors has garnered more news, perhaps in that the lower prices may actually boost demand.

Today’s boost gets AMD stock up to levels not seen since last October. There really does seem to be more of a move here from traders and investors playing a technical share price breakout versus a news trade spiking this stock higher.