Scottish Mortgage’s Share Sale Blitz Signals a New Era as Arm and SpaceX Supercharge the Portfolio

The closed-end fund reverses a £3bn buyback program, issuing shares at a 6.5% premium to NAV as AI and space tech holdings drive a 35% YTD surge, fueled by Arm and Nvidia.

Scottish Mortgage Investment Trust has executed a dramatic pivot from share buybacks to aggressive issuance, capitalising on a surge in demand that has pushed its stock to a fresh 52-week high of €18.85. The closed-end fund placed 2.25 million new shares on Friday alone at roughly 1,496 pence apiece, pulling in nearly £34 million. The move marks a complete reversal from two years ago, when the trust spent around £3 billion repurchasing shares to prop up a price stuck below net asset value.

Now the fund’s stock trades at a 6.5% premium to its underlying value, a reflection of the investor frenzy surrounding its heavy exposure to artificial intelligence and space technology. Year to date, the shares have climbed roughly 35%.

The latest leg of the rally has been fuelled by Arm Holdings, in which Scottish Mortgage holds a sizeable stake. The chip designer’s stock surged 46.5% in a single week to $306.51, bringing its annual gain to 180%. Analysts at Bernstein reaffirmed their buy rating with a $300 price target, citing projected earnings growth of fivefold by 2030. TD Cowen also lifted its target, pointing to over $2 billion in customer orders for AI chip designs and a 49% profit jump in the fourth quarter.

Nvidia, another core holding, continues to power the trust’s performance. The US chip giant recently posted quarterly revenue of $81.6 billion, comfortably above market forecasts. Scottish Mortgage has also benefited from Nvidia’s expanded partnership with Marvell Technology, a deal worth $2 billion that targets custom networking solutions for AI data centres. Nvidia itself is targeting roughly $560 billion in annual revenue by 2029.

About 40% of Scottish Mortgage’s portfolio sits in unlisted companies, a factor that has amplified the premium to NAV as investors chase exposure to high-growth private names. Holdings include ByteDance, Stripe and the AI developer Anthropic. Shareholders recently gave the green light for an additional £250 million to be deployed into private investments. A separate line-up, SpaceX, is preparing for a blockbuster initial public offering, with a valuation target of between $1.5 trillion and $2 trillion. The rocket builder generated $18.7 billion in revenue in 2025, of which Starlink contributed $11.4 billion, though it booked a net loss of nearly $5 billion. Starlink has just secured regulatory approval in South Korea, with operations expected to begin in June.

The trust’s annual general meeting is set for 2 July in Edinburgh, where investors will vote on a final dividend of 2.79 pence per share – a yield of just 0.32%, underscoring Scottish Mortgage’s pure-growth identity.

With nearly 60% of assets tied to the US market, the fund’s trajectory remains closely linked to upcoming American economic data. The current issuance strategy works only as long as the AI euphoria persists. A shift in sentiment could quickly erode the premium that has enabled this radical change in capital management.