Scottish Mortgage Warns on AI Spending Even as SpaceX Bet Nears Lucrative Exit

Scottish Mortgage Trust warns AI infrastructure spending is unsustainable, cuts Nvidia stake as SpaceX prepares for Nasdaq debut, while shares hit 52-week high.

The managers of Scottish Mortgage Investment Trust have sounded an unusually cautious note on the artificial-intelligence infrastructure boom, even as the portfolio’s biggest winner prepares for an eagerly awaited public listing. Tom Slater and Lawrence Burns described the capital pouring into AI hardware and energy projects as “not sustainable”, and revealed they had trimmed the trust’s position in Nvidia after years of exceptional gains.

The warning comes as Scottish Mortgage’s own shares hit a fresh 52?week high of €17.73 on Friday, extending gains this year to roughly 28%. The trust now trades at a premium to net asset value – a stark reversal from the persistent discount that dogged it for years. Management has seized the opportunity, issuing stock above NAV twice in the same week: 1.5 million shares at 1,444.67p on 19 May, and another 2.2 million at 1,476.17p two days later. Total shares outstanding now stand at about 1.1 billion.

The fund’s annual report for the year to March 2026, released on Thursday, showed net asset value rising 11.2% to 1,394.81p per share, supported by strong revaluations in private equity and an earlier tech rally. Over the trailing twelve months the trust delivered a return of nearly 52%, while in the period to April 2026 it gained 18.89% – more than three times the benchmark’s 4.90%. Ironing consistent dividend growth, Scottish Mortgage has increased its payout for 43 consecutive years, a feat that earns it “AIC Dividend Hero” status.

Nvidia – a bittersweet contributor

Nvidia remains one of Scottish Mortgage’s largest listed holdings, alongside Taiwan Semiconductor and ASML. The chipmaker reported a record first?quarter revenue of $81.6 billion for fiscal 2027, up 85% year on year, with its data?centre segment surging 92% to $75.2 billion. It also announced a multibillion?dollar buyback programme and lifted its quarterly dividend from $0.01 to $0.25 per share. Yet the stock slipped 1.5% after the numbers, a sign that market expectations have become almost unattainable for a company growing at that pace.

The trust’s reduction in Nvidia is described as a tactical move. After the partial sale, Scottish Mortgage is now underweight the so?called Magnificent Seven relative to global indices. The combined exposure to Amazon, Meta, Nvidia and Tesla accounts for only about 10% of the total portfolio.

SpaceX takes centre stage

The real heavyweight in the portfolio is no longer a public company. SpaceX has become the dominant driver of net asset value, jumping from 8.2% at the end of 2025 to 19.3% as of March 2026, worth roughly £3 billion. The trust revalued the stake in March following an external transaction that implied a valuation of $1.25 trillion; current market estimates now range from $1.75 trillion to $2 trillion.

The timing is propitious. SpaceX has filed detailed financials with the SEC, widely seen as preparation for a Nasdaq listing under the ticker “SPCX” as early as 12 June. Starlink, the satellite?internet division that is the group’s only profitable unit, generated $11.38 billion in revenue last year and contributed $1.19 billion in operating profit during the first quarter of 2026.

Private?equity constraints and future catalysts

The trust’s allocation to unlisted companies hovers near the 30% threshold. To retain flexibility, shareholders recently approved an emergency facility that allows up to £250 million in additional private?equity investments without forcing disposals. This capacity means Scottish Mortgage can participate in future funding rounds of its most successful private holdings – and wait for a suitable IPO exit.

Attention now turns to the annual general meeting in Edinburgh on 2 July, where the retirement of Professor Maxwell from the board will be put to a vote. Between now and then, the market will decide whether the current premium on Scottish Mortgage’s shares is justified by the SpaceX story – or whether a recalibration lies ahead.