The latest results from Scottish Mortgage Investment Trust (LON:SMT) underline how dramatically sentiment has shifted since the growth-stock sell-off of 2022/23. After a prolonged period trading on double-digit discounts to net asset value (NAV), the trust has enjoyed a sharp recovery in both NAV and share price performance, helped by renewed enthusiasm for artificial intelligence, private technology assets and a potentially historic IPO pipeline led by SpaceX.
NAV total return rose 27.4% and share price 26.8%, both outperforming the FTSE All-World Index (18%).
| Scottich Mortgage (LON:SMT) | Price: £15.25 (+23% past 3m) | Market cap: £16.85bn |
Lead manager Tom Slater has become increasingly outspoken about the scale of the opportunity facing Scottish Mortgage’s private technology holdings, particularly SpaceX and the wider artificial intelligence ecosystem.
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In recent investor presentations, Slater described AI as potentially ‘the biggest technological revolution of our lifetimes’, arguing that investors remain too focused on short-term concerns about spending cycles and not enough on the long-term winners likely to dominate the infrastructure and software layers of the AI economy.
📈 Discount to NAV wiped out
One of the biggest changes for retail investors is the narrowing discount to NAV. Scottish Mortgage spent much of 2023 trading at discounts near 15%-20%, prompting aggressive buybacks. By early 2026, the discount had narrowed materially as investor appetite returned and portfolio valuations recovered.
| Scottish Mortgage recovery snapshot | 2023 trough | May 2026 |
| Approximate discount to NAV | ~15-20% | Mid-single digits |
| Share buyback programme | £1bn announced | Continuing support |
| NAV trend | Falling after tech sell-off | Strong recovery |
| Investor sentiment | Weak | Improving rapidly |
🧩 Key Themes from Results
- Strong rebound in investor sentiment toward growth and technology assets.
- Private holdings, especially SpaceX, materially boosted NAV performance.
- SMT narrowed discount to NAV .
- Since year end to date, discount as become premium to NAV.
- AI-related holdings and US tech exposure were significant contributors.
- Management continues long-term growth strategy despite market volatility.
Scottish Mortgage Investment Trust
🔗 SMT’s SpaceX factor
A major reason for the rebound is SpaceX. Scottish Mortgage first invested roughly $200m between 2018 and 2021, and that holding is now valued at approximately $3.94bn (£2.98bn), making it the trust’s largest position.
The trust currently values SpaceX at $1.25tn, notably below media speculation of a potential IPO valuation between $1.75tn and $2tn. Management says it prefers ‘verifiable transactions’ rather than speculative pricing.
| Key SpaceX valuation metrics | Data |
| Scottish Mortgage stake value | ~£2.98bn |
| Portfolio weighting (March 2026) | 19.3% |
| Internal SpaceX valuation | $1.25tn |
| Rumoured IPO valuation | $1.75tn-$2tn |
| Original investment | ~$200m |
If SpaceX ultimately floats near the higher end of expectations, analysts estimate another meaningful uplift to Scottish Mortgage’s NAV could follow.
Scottish Mortgage also increasingly views SpaceX less as a traditional aerospace company and more as foundational infrastructure for future digital economies. Slater recently said:
‘SpaceX is no longer best understood as a rocket company – it is becoming infrastructure for the global economy.’
✔️ Private Growth Commitment
That broader thesis helps explain why Scottish Mortgage remains heavily committed to private growth companies despite criticism over portfolio concentration and unquoted exposure. Management believes the trust is positioned around long-duration winners in AI, automation, cloud computing and digital infrastructure.
The managers also continue to highlight other portfolio companies with major AI optionality and potential IPO appeal in coming years, including ByteDance, Stripe, Databricks and Anthropic. Slater recently said Anthropic is already among ‘the fastest-growing technology companies of all time’.
| Potential future IPO holdings | Why investors care |
| ByteDance | TikTok owner remains one of the world’s most valuable private tech firms |
| Stripe | Fintech recovery could revive IPO ambitions |
| Databricks | Major AI infrastructure beneficiary |
| Tempus AI | AI-driven healthcare analytics growth |
| Epic Games | Long-term metaverse and gaming optionality |
However, concentration risk remains significant. SpaceX alone accounts for close to one-fifth of assets, while unquoted holdings have exceeded the trust’s traditional 30% ceiling after rapid valuation gains and buybacks reduced listed holdings.
🧠 SMT a Hybrid Fund?
For retail investors, Scottish Mortgage increasingly resembles a hybrid between a global technology fund and a late-stage venture capital portfolio. That creates exceptional upside potential if IPO markets reopen fully but also means higher volatility than traditional global equity funds.
But the trust’s future performance is increasingly tied to whether these AI and private market ambitions ultimately justify today’s valuations.
👉 The key question now is whether the trust can sustain its renewed momentum if AI enthusiasm cools or if private market valuations disappoint.
For now, though, latest results from Scottish Mortgage underline how dramatically sentiment has shifted in recent years, and Scottish Mortgage has firmly re-established itself as one of the UK market’s highest-profile growth investment trusts.
Disclaimer: The author Steven Frazer has a personal interest in Scottish Mortgage.
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