Can the red hot Scottish Mortgage share price smash the FTSE 100 again in 2025?

The Scottish Mortgage share price moved substantially higher in 2024. Edward Sheldon expects further gains next year and in the long run.

| 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.

Image source: Getty Images

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.

At the start of 2024, I put a few thousand pounds into Scottish Mortgage Investment Trust (LSE: SMT). That was a good move – as I write this shortly before Christmas, the Scottish Mortgage share price is up 17% year to date versus a 4% gain for the FTSE 100 index (I’m not factoring in dividends here).

Can this growth-focused investment trust beat the Footsie again in 2025? I think so. Here’s why.

Created with Highcharts 11.4.3Scottish Mortgage Investment Trust Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Hot themes

The reason Scottish Mortgage shares have done well in 2024 is that the investment trust provides exposure to companies that are in growth industries. I’m talking about industries such as artificial intelligence (AI), cloud computing, online shopping, space exploration, and computer chips.

Should you invest £1,000 in Scottish Mortgage 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 Scottish Mortgage made the list?

See the 6 stocks

I fully expect these industries to continue growing next year (which should be good for Scottish Mortgage). In most cases, these industries are projected to grow by 10% or more per year up to 2030.

One industry I’m particularly excited about is AI. Right now, we’re seeing the second phase of this technology, where companies are rolling out AI solutions that are enhancing their products and driving revenue growth.

Some companies in the Scottish Mortgage portfolio that could do well in this phase include Amazon, Shopify, and Meta Platforms (which are all in the top 10 holdings). All of these businesses are very active in the AI space and are introducing features across their product portfolios.

Growth stocks

Now, many stocks in the portfolio have done well this year. For example, Nvidia, which is currently a top 10 holding, is up 170% year to date.

I see plenty of stocks Scottish Mortgage holds with potential for gains in 2025 as well. One is Amazon. It has unperformed the other Big Tech stocks in recent years and is now playing catch-up. With earnings rising sharply, I think it could do well next year although there are no guarantees, of course.

Another stock that could do well next year is ASML. It specialises in sophisticated equipment needed to manufacture AI chips. There is some uncertainty here due to export restrictions. But if orders are strong, I think the stock could do well.

Overall, I see lots of stocks with potential for 2025. If they do well, the Scottish Mortgage share price should rise.

Anything can happen

Of course, in the stock market anything can happen in the short term. So Scottish Mortgage shares may not outperform the FTSE 100.

One factor that could cause weak performance is some profit-taking in tech shares. They’ve had a great run over the last two years so they could see a pullback.

Another is interest rates. If they were to move higher, unlisted company valuations could take a hit.

Alternatively, the FTSE 100 could have a purple patch. It hasn’t done much over the last five years, so it could experience a pop and beat the investment trust.

My money is on the Scottish Mortgage Investment Trust to beat the Footsie though. I’m expecting another year of great returns.

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

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.

Ed Sheldon has positions in ASML, Amazon, Nvidia, Scottish Mortgage Investment Trust Plc, and Shopify. The Motley Fool UK has recommended ASML, Amazon, Nvidia, Meta Platforms, and Shopify. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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. 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 Growth Shares

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.
Investing Articles

Up 50%? The Aston Martin share price forecast is mind-blowing! 

If analysts are right, the Aston Aston Martin share price could absolutely rocket in the year ahead. Harvey Jones says…

Read more »

Investing Articles

Up 279% in 5 years, could Meta stock keep soaring?

Meta stock has more than tripled in five years. This writer sees lots to like about the business but also…

Read more »

Young Caucasian man making doubtful face at camera
Investing Articles

2 popular UK growth stocks I wouldn’t touch with a bargepole in today’s market

Buying growth stocks can deliver market-beating returns, but this FTSE 250 pair doesn't look like a convincing investment for our…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Around a 1-year high, is there enough value left in Next’s share price to make it worth me buying?

Next’s share price has risen a lot in eight months, but there could still be a lot of value left…

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 »

Investing Articles

At a 52-week low but forecast to rise 73%! Is this growth share the FTSE’s top recovery play? 

This FTSE 100 growth share has taken an absolute beating over the past two years but Harvey Jones says the…

Read more »

Investing Articles

Up 19% in 2 weeks, can the Tesla share price rebound further?

Tesla's first-quarter delivery numbers came out today. Will they help persuade our writer to invest his money at the current…

Read more »

Young Black woman looking concerned while in front of her laptop
Investing Articles

£10,000 invested in Raspberry Pi shares at the beginning of 2025 is now worth…

Raspberry Pi shares offer something a little different for UK-focused investors. But while the minicomputer company surged after IPO, it’s…

Read more »