It’s been a long and winding road back for Scottish Mortgage Investment Trust (LSE:SMT) shares. But after four years, they’ve finally reached the price they were at in January 2022 — a little under £12.
Fortunately though, investors who piled into the FTSE 100 trust 12 months ago have done much better, with a 23% gain. This means every £15,000 invested a year ago is now worth roughly £18,500.
Scottish Mortgage has increased its annual dividend for 43 consecutive years, but the yield is tiny at 0.37%. People clearly aren’t buying the stock for income. They’re buying for growth and Scottish Mortgage delivered that in 2025.
But what about 2026?
One reason to be cautious
The trust’s portfolio is global, with holdings from Europe (ASML, Ferrari, Spotify, Hermès), China (BYD, CATL, PDD Holdings), and Latin America (MercadoLibre, Nu Holdings).
However, most of the holdings are still US-listed, so what happens across the pond will be key. And while fragile in places, the US economy is forecast to grow in 2026, which would likely propel the S&P 500 higher.
Meanwhile, the global economy also appears resilient, despite all the uncertainty caused by tariffs. As things stand, a global recession is seen as unlikely by most economists.
That said, a recent Deutsche Bank survey found that a collapse in tech/AI valuations was seen as the biggest market threat in 2026. “AI/tech bubble risk towers over everything else,” the report warned.
Scottish Mortgage holds Amazon, Meta and TikTok owner ByteDance, all of which are spending a fortune on building AI data centres. It also has chunky positions in chip foundry Taiwan Semiconductor Manufacturing (TSMC) and AI kingpin Nvidia.
On top of this, the trust recently invested in private AI company Anthropic. According to Deutsche, this loss-making start-up was trading at a hefty price-to-sales ratio of 44 in December.
So, if AI/tech valuations drop this year, Scottish Mortgage stock will likely struggle. This is the key risk I see here in 2026.
IPO year
On balance though, I’m quite optimistic that 2026 will be another positive one for shareholders. Interest rates are falling, which tends to support growth stock valuations, while AI is going beyond mere chatbots to AI agents, robots, and self-driving cars.
Moreover, 2026 is poised to be a big year for IPOs, led by the trust’s largest holding SpaceX. Reports say the rocket pioneer could be valued as highly as $1trn+, after the firm carried out a record 165 Falcon 9 missions in 2025 (more than the rest of the world combined!)
However, it’s SpaceX’s satellite internet service Starlink that is currently driving significant revenue growth for the firm. It now has over 9m active users — roughly double the year before — across 155 countries and territories. Starlink is powered by a constellation of 9,000+ low-Earth-orbit satellites.
On the back of this IPO news last month, Scottish Mortgage upwardly adjusted its valuation of SpaceX. It now makes up around 15% of the entire portfolio.
As such, I expect some profit harvesting in SpaceX (if it goes public) to rebalance the portfolio. With this cash, the trust could add to existing holdings or new ideas, as well as do more share buybacks.
For investors wanting exposure to long-term tech trends, I think the shares are still worth considering for a diversified portfolio.
