Scottish Mortgage Investment Trust Nears All-Time Highs on SpaceX and AI Bets
The investment trust has recovered from a post-pandemic slump, driven by significant gains in its private holdings like SpaceX and promising AI ventures.
Scottish Mortgage Investment Trust has recovered from a five-year post-pandemic slump and is now trading near its all-time highs, with significant contributions from its private equity holdings, particularly SpaceX, and emerging artificial intelligence companies. The trust's share price has completed a recovery that tested investor patience for nearly five years, outpacing the global market.
Over the year to July 2, 2026, Scottish Mortgage delivered net asset value (NAV) and share price total returns of 39.2% and 45.3% respectively, compared to the global market's return of 29.1%. This rebound follows a period where the trust's shares fell nearly 60 percentage points behind the global market, leading its discount to widen to almost 23%.
The SpaceX Effect
The trust's recovery has been significantly boosted by developments in its private portfolio, most notably SpaceX. Baillie Gifford, the trust's manager, first invested in SpaceX in December 2018 when the company was valued at $31 billion. On June 12, 2026, SpaceX completed a historical IPO, raising $75 billion and achieving a valuation of $1.77 trillion. The rapid growth of SpaceX prior to its listing led to Scottish Mortgage's exposure to private companies exceeding its self-imposed 30% limit, prompting shareholders to approve a temporary increase to the unlisted budget.
Investor sentiment towards Scottish Mortgage improved dramatically in the lead-up to SpaceX's IPO, with shares moving to a premium to NAV of around 8% by late May, a significant shift from years spent at a double-digit discount. However, post-listing excitement has cooled, with SpaceX shares falling from an initial peak of $225 to $162 by the time of publication. This decline contributed to a 7% drop in Scottish Mortgage's share price in June, and the trust shifted back to a discount of 10%, which has since narrowed to 7%.
Starlink, SpaceX's satellite division, has surpassed 10 million subscribers across 155 countries by early 2026, generating $11.4 billion of SpaceX's total $18.7 billion revenues in 2025. While other divisions, including launch and AI, are not yet profitable, the valuation is largely based on future potential. With lock-up restrictions releasing shares in tranches through December 2026, volatility is anticipated.
Beyond SpaceX: AI and Fintech
Scottish Mortgage holds stakes in over half of the world's ten most valuable private companies, with a compelling pipeline beyond SpaceX. Anthropic, an AI company first backed in August 2025 at a valuation of $183 billion, is developing AI models for the workplace and has seen its revenues grow significantly. Anthropic has confidentially filed for an IPO at a pre-IPO valuation nearing $1 trillion.
Another key investment is Revolut, the fintech provider. Since securing its UK banking license, Revolut serves over 70 million customers globally, with one in three new European bank accounts opened with the company. This license allows Revolut to fully capture banking economics, including deposits, credit, and loans. Revolut's valuation has grown from around $45 billion at the time of Scottish Mortgage's purchase to approximately $115 billion.
Other notable investments include Enveda, a biotechnology company using AI for drug discovery, with 12 drug candidates in development. Valued at around $1 billion at the end of 2025, Enveda has raised over $500 million in capital.
Not all private investments have been successful. Northvolt, a previous significant holding focused on European battery capacity, was written down to zero due to insurmountable scaling challenges. The trust's managers have refined their private company selection process in light of such experiences.
Future Prospects and Risks
Despite potential headwinds, Scottish Mortgage is seen as having continued potential. Its private book contains established high-growth names and earlier-stage companies poised for significant returns. At a 7% discount and with an ongoing charge of 0.31%, the trust offers a compelling opportunity for investors who may have missed its previous double-digit discount periods.
However, risks remain. The trust's history, particularly the past five years, highlights the potential for significant performance declines. Furthermore, its concentrated portfolio is susceptible to broader market forces, including geopolitical tensions, inflation, and interest rate expectations, which can cause sharp repricing of entire sectors.