1 intriguing growth stock that could send Scottish Mortgage shares above £10

Scottish Mortgage shares have been recovering nicely, boosted by a very strong performance in one of the trust’s largest holdings.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Scottish Mortgage Investment Trust (LSE: SMT) shares have found their groove again in recent months. They’re now up around 30% in 12 months. And in 2024 alone, they’ve advanced 10% to 890p (that’s better than the FTSE 100 year to date).

Created with Highcharts 11.4.3Scottish Mortgage Investment Trust Plc PriceZoom1M3M6MYTD1Y5Y10YALL3 Jun 20193 Jun 2024Zoom ▾Jul '19Jan '20Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '242020202020212021202220222023202320242024www.fool.co.uk

Clearly, Nvidia‘s staggering performance has helped, as has strong share price gains for Temu owner PDD Holdings over the last year.

Meta Platforms stock has also done well since it was reintroduced into the portfolio a few months ago.

Should you invest £1,000 in Moderna right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Moderna made the list?

See the 6 stocks

This is encouraging because these are large Scottish Mortgage holdings. The picture isn’t as pretty down the bottom of the portfolio, but that shouldn’t be a big negative long term. It’s the top end that really matters.

Here, I’ll consider one major holding that has also been surging higher recently. Given its heavy weighting, it could boost further returns for the trust if progress continues.

Bird flu outbreak

I’m talking about messenger RNA (mRNA) vaccine pioneer Moderna (NASDAQ: MRNA). The stock has been on a tear, doubling in value since November.

Created with Highcharts 11.4.3Moderna PriceZoom1M3M6MYTD1Y5Y10YALL31 May 201931 May 2024Zoom ▾Jul '19Jan '20Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '242020202020212021202220222023202320242024www.fool.co.uk

This is partly down to an outbreak of bird flu spreading among dairy cows. Moderna shares have risen 35% since 1 April, when the second known human case in the US was reported.

A third person recently tested positive after having contact with cattle carrying the H5N1 virus. And while no human-to-human transmission has been reported yet, the US government isn’t taking any chances.

Reports say federal funding could be heading the way of Moderna and vaccine rival Pfizer to test experimental shots against several strains of the virus (including the circulating one).

On 30 May, Moderna told Reuters that it had already completed dosing in an early-to-mid stage study of the vaccine, and it expects data from this soon.

A software firm in disguise

In a nutshell, we have here the reason why Scottish Mortgage managers believe Moderna could become a transformational growth company.

The speed at which its mRNA platform can tweak code to summon up effective vaccine candidates on demand is astonishing. This is why I’m invested in this stealthy software company.

Just as Nvidia’s GPUs have uses beyond computer graphics, mRNA technology offers a wide range of applications outside of Covid vaccines.

Already, we’re seeing very encouraging data from trials of a personalised mRNA skin cancer vaccine that activates the body’s immune system to identify cancerous cells and remove them.

There’s the potential this could work in indications outside melanoma, with trials for non-small cell lung cancer vaccines ongoing.

Above £10?

Naturally, there are risks with Moderna, as there are with Scottish Mortgage shares. One is a return of inflation, which could keep interest rates higher for longer and heap pressure on both share prices.

Plus, Moderna’s at the mercy of clinical trials, which can always go wrong at any stage. It has over 40 drugs in development, including a vaccine for AIDS. Crucially though, it has the wherewithal ($13.3bn at year-end) to fund these programmes.

On 31 May, the company had its second mRNA product approved for respiratory syncytial virus (RSV). It expects to return to sales growth in 2025 following a massive post-Covid drop-off in demand.

If more progress follows in the coming months, I expect excitement to build and potentially push Scottish Mortgage shares above £10.

AI Revolution Awaits: Uncover Top Stock Picks for Massive Potential Gains!

Buckle up because we're about to dive headfirst into the electrifying world of AI.

Imagine this: you make a single savvy investment in some cutting-edge technology, then kick back and watch as it revolutionises entire industries and potentially even lines your pockets.

If the mere thought of riding this AI wave excites you and the prospect of massive potential returns gets your pulse racing, then you’ve got to check out this Motley Fool Share Advisor report – 'AI Front Runners: 3 Surprising Stocks Riding The AI Wave’!

And here’s the kicker – we’re giving you an exclusive peek at ONE of these top AI stock picks, absolutely free! How’s that for a bit of brilliance?

Get your free AI stock pick

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Ben McPoland has positions in Moderna and Scottish Mortgage Investment Trust Plc. The Motley Fool UK has recommended Meta Platforms and Nvidia. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

3 shares I’ve bought in the 2025 stock market sell-off

The stock market has experienced a lot of turbulence in recent weeks. Edward Sheldon has been taking advantage and buying…

Read more »

Investing Articles

Investors considering HSBC shares could aim for £8,453 a year in passive income from just £5 a day!

A relatively small daily investment in HSBC shares over several years can produce an extraordinary level of annual passive income…

Read more »

Investing Articles

The Rolls-Royce share price has fallen! Is this the moment investors have been waiting for?

Even the Rolls-Royce share price can't escape current stock market volatility, falling slightly over the last week. Should investors consider…

Read more »

Modern suburban family houses with car on driveway
Investing Articles

Down 59% from its 12-month highs, is this FTSE 250 stock too cheap to ignore?

Shares in FTSE 250 housebuilder Vistry are almost certainly too cheap to ignore. But are they discounted enough to offset…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

As the S&P 500 struggles to recover, here’s what Warren Buffett’s doing

The S&P 500 is fighting to regain its February highs amid ongoing trade tariff uncertainty. Our writer looks to the…

Read more »

Investing Articles

When will Lloyds shares hit £1?

Lloyds shares have surged over the past 12 months, but where will they go next? Dr James Fox thinks there’s…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

Stock-market crash: the meltdown of the Magnificent 7

Just before Christmas, these Magnificent Seven stocks were riding high. But after the worst quarter for US stocks since autumn…

Read more »

Investing Articles

Wow! IAG shares are undervalued by 47%, according to analysts

IAG shares have surged over the past 18 months, but analysts are pointing to more growth. Dr James Fox takes…

Read more »