Scottish Mortgage rises as SpaceX stock rebounds and portfolio bargains emerge

Scottish Mortgage Trust share price has jumped in the last three consecutive days, reaching its highest level since June 22, helped by the ongoing SpaceX stock rebound. SMT jumped to 1,470p, up by 8.46% from its lowest point this year. So, is this investment trust a good buy today?

Scottish Mortgage Trust portfolio analysis

Scottish Mortgage, the biggest investment trust in the UK, has done well in the past few years. It has jumped by 123% since 2023, beating the FTSE 100 Index, which has soared by 37.40%. 

The trust has done well this year because of its exposure to SpaceX, which went public last month. It is also exposed to other important companies that dominate key areas. For example, it has a large stake in Taiwan Semiconductor, which makes chips for firms like Apple, Nvidia, and AMD.

Scottish Mortgage also has a large stake in ByteDance, the creator of TikTok, Amazon, Stripe, and Meta Platforms. Its other large investments are companies like Meta Platforms, ASML, MercadoLibre, and Shopify. 

All these companies have major strengths. For example, SpaceX is the biggest player in the broadband internet and satellite launch industry. It has also become a major name in the neocloud industry, where it is competing with firms like IREN, CoreWeave, and Nebius. 

It recently secured a deal with Google, where it will receive over $912 million a month. It also secured a deal worth over $6 billion with Reflection. Additionally, the stock will soon join the Nasdaq 100 Index, a process that will lead to accumulation by ETFs tracking the index. This explains why it has recovered in the past few days.

Still, there are risks associated with SpaceX today. For example, its upcoming earnings may drag its stock lower, while the end of the lock-up period may lead to more insider sales. 

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Top SMT stocks have become bargains

Another possible catalyst for the Scottish Mortgage share price is that some of its biggest companies have become bargains. A good example of this is Nvidia, which is being traded as a value stock, while it is one of the fastest-growing companies in Wall Street. It has a forward price-to-earnings ratio of 22, lower than the S&P 500 Index’s 23. 

Similarly, despite its booming growth, Taiwan Semiconductor has a forward PE ratio of 28. Amazon trades at a forward P/E ratio of 27, while Meta Platforms has a multiple of 17. 

Most importantly, Scottish Mortgage has large stakes in companies like Stripe and Anthropic that may become huge. Anthropic was recently valued at over $900 billion, three months after raising funds at a $300 billion valuation. A Polymarket poll estimates that the company will get to $1.7 trillion valuation after its IPO. 

Scottish Mortgage also holds a stake in Stripe, one of the fastest-growing fintech companies in the world. The company was recently valued at $150 billion, with Polymarket traders predicting that it will get to $200 billion. 

Scottish Mortgage share price technical analysis

SMT stock chart | Source: TradingView

The weekly chart shows that the Scottish Mortgage stock price has been in a strong uptrend in the past few years. It recently formed a morning star pattern, a common bullish reversal sign. Also, it remains above the 50-week and 100-week Exponential Moving Averages (EMA), a sign that bulls remain in control.

The stock has also formed a bullish flag pattern. Therefore, there is a possibility that it will continue rising as bulls target the key resistance at 1,560p, its highest point on June 1. A move above that price will point to more gains towards 1,600p.