Scottish Mortgage Investment Trust has made a bold move, with 25.7% of its total assets now tied up in SpaceX stock. This significant concentration reflects the trust's early bet on the aerospace company back in 2018, which has seen its share value rise dramatically over the years.

As of late June, the trust's investment in SpaceX has become its largest holding. However, selling shares is currently off-limits due to restrictions imposed by SpaceX, which will only be lifted after the company reports its second-quarter results in August. Following that report, Scottish Mortgage may be allowed to sell 20% of its holdings, with the possibility of increasing that limit to 30% if SpaceX shares trade at least 30% above their $135 IPO price.

Performance and Future Prospects

The Scottish Mortgage Investment Trust has seen solid gains since late 2023, with its share price more than doubling. The key role of SpaceX in this surge cannot be overstated, as the trust's early investment has appreciated significantly. Despite the current selling restrictions, the market's volatility around SpaceX shares will continue to influence the trust’s net asset value until mid-December, when Scottish Mortgage can potentially divest its entire position.

Tom Slater, the manager of the trust, remains optimistic about SpaceX's strategic importance. He described the company as a dual monopoly in both launch capabilities and global connectivity, emphasizing that its Starlink division generates recurring revenue, a crucial aspect for long-term growth. As Slater pointed out in his July 2026 commentary, “Starlink builds highly profitable, recurring revenue through assets placed in orbit.”

Currently, SpaceX has an impressive market value estimated at $1.8 trillion and is trading at about 47 times its projected annual sales. However, it is anticipated that the company will not see profits until 2028 as it continues to invest heavily in expansion and artificial intelligence infrastructure.

Meanwhile, the Scottish Mortgage trust continues to diversify its portfolio, with its other investments spanning the digital finance landscape. This strategy aims to balance the concentration risk posed by its large stake in SpaceX.

This material is for informational purposes only and should not be considered financial advice.