Scottish Mortgage Sells into Strength as It Piles into Axon and Scales Back Tesla
26.05.2026 - 01:01:43 | boerse-global.de
The Scottish Mortgage Investment Trust is making the most of a rare premium to net asset value, issuing new shares at the fastest clip in years while simultaneously overhauling its portfolio. Manager Baillie Gifford has slashed exposure to Tesla for the first time in over a decade and poured capital into Axon Enterprise, a security-technology company pivoting hard toward artificial intelligence. The moves underscore a broader bet on AI-driven growth that now defines the trust’s strategy.
Last Friday alone, Scottish Mortgage placed 2.25 million new shares at around 1,496 pence apiece, raising roughly £34 million. That issuance mark a dramatic reversal from the previous two years, when the trust traded below its net asset value and plowed about £3 billion into share buybacks to support the price. Now the shares command a premium of approximately 6.5% over NAV — and management is happy to sell into that strength. The stock recently changed hands at €18.85, up 35.7% since the start of the year.
The top destination for the new cash is Axon Enterprise, best known for Tasers and body cameras but increasingly focused on AI-powered security solutions. Scottish Mortgage snapped up 2.5 million additional Axon shares, boosting its holding by 50%. The move comes as Axon reported first?quarter revenue of $807 million, a 34% increase and the ninth consecutive quarter with growth above 30%. Analysts expect full?year sales of $3.65 billion, implying 31% annual expansion. Despite that trajectory, the stock trades at roughly $400 — about 50% below its all?time high — while the average analyst price target sits at $649.
At the other end of the portfolio, Tesla has fallen out of the top?30 holdings for the first time since Baillie Gifford first backed Elon Musk’s carmaker. The electric?vehicle stake now accounts for just 0.8% of assets, ranking 37th. Roughly £700 million has flowed out of the Tesla position over the past twelve months, with a portion redirected into the fintech startup Revolut.
Should investors sell immediately? Or is it worth buying Scottish Mortgage Investment?
Private companies remain the trust’s largest single exposure, representing about 40% of the portfolio. Holdings include TikTok owner ByteDance, the AI developer Anthropic, and SpaceX. Shareholders recently approved an additional £250 million of headroom for unlisted investments, giving manager Tom Slater the firepower to expand the roster of 53 private firms. The broader AI theme also gets a lift from Nvidia, which delivered a quarterly revenue of $81.6 billion, cementing its role as a portfolio tailwind.
Income investors get little comfort from Scottish Mortgage. The proposed final dividend of 2.79 pence per share yields a meagre 0.32%, consistent with the trust’s pure?growth profile. Still, the board has raised the payout for 43 consecutive years, earning it “dividend hero” status from the Association of Investment Companies. Meanwhile, ongoing charges have slipped to 0.31% from 0.34%.
One notable vulnerability is the trust’s shareholder base. Institutions own just 8.6% of the shares, compared with 63.6% for peer trust 3i. That heavy retail skew makes Scottish Mortgage more susceptible to sentiment swings — especially when a large chunk of the portfolio is tied to illiquid private assets.
The annual general meeting is set for July 2 in Edinburgh, where investors will vote on the dividend and hear from the manager. In the near term, US macroeconomic releases will be the main catalyst: nearly 60% of assets are exposed to the American market, and upcoming data on consumer spending and first?quarter GDP could either reinforce or undermine the valuation of the trust’s tech?heavy holdings. For now, the issuance machinery keeps turning, but it will halt the moment the premium evaporates — a risk that grows as the AI euphoria ebbs and flows.
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