Scottish Mortgage Trust (SMT) shares have entered a correction, falling roughly 14% from their year-to-date high, as investors weigh a sharp pullback in its largest holding, SpaceX, against a wave of strong earnings from other portfolio companies. The stock was trading near 1,361p on Tuesday, about 12% below its all-time high, yet it has managed to hold above its 200-day exponential moving average (EMA), a level that technical traders often view as a key trend indicator.
SpaceX drags on SMT
The recent slide in SMT shares has been driven largely by SpaceX, which accounts for approximately 17% of the trust's net asset value. SpaceX stock has dropped more than 50% from its peak, erasing over $1 trillion in market value. The decline comes ahead of the company's first public earnings report, scheduled for later today, and follows a period of intense volatility around its IPO and subsequent lock-up expiry. As SpaceX shares slid 2.5% in recent sessions, investors are bracing for potential further swings.
Analysts expect SpaceX's quarterly revenue to exceed $6 billion, supported by its launch services, Starlink subscriber growth, and a booming data center business. Wall Street remains broadly bullish, with a consensus price target of $230, well above the current level of around $114. Firms such as RBC, William Blair, Bernstein, and KeyCorp have issued optimistic outlooks, though some caution that governance concerns and the upcoming lock-up expiry could add near-term pressure. For a deeper look at these risks, see Jefferies' take on SpaceX's earnings.
Strong earnings from other key holdings
Offsetting some of the SpaceX weakness, several of SMT's other major positions have delivered robust results. TSMC, the trust's second-largest holding, reported revenue of over $40 billion, up 33% year-over-year, with gross margin expanding to 67.7% and net margin reaching 55.6%. The semiconductor giant continues to benefit from surging AI demand, and peers like Nvidia, Apple, Qualcomm, and AMD have all issued strong guidance, suggesting the cycle remains intact.
Amazon, another top holding, posted solid numbers with its AWS cloud division seeing continued momentum. ASML and MercadoLibre also reported healthy metrics. Additionally, SMT holds a significant stake in Anthropic, the AI company behind Claude. Recent reports indicate Anthropic's annualized revenue is on track to reach $74 billion, and its valuation has climbed above $900 billion, with expectations it could cross $1 trillion in the next funding round.
Technical picture: support holds, but risks remain
From a technical standpoint, SMT shares have pulled back from a June high of 1,561p to the current 1,365p, yet they have stayed above the 200-day EMA and an ascending trendline that has connected the lows since November 2025. This suggests the broader uptrend remains intact, and a bounce toward the 1,500p resistance level is possible. However, a decisive break below the trendline would signal further downside, potentially opening the door to deeper losses.
Investors will be watching the SpaceX earnings release closely, as any surprise could trigger outsized moves in SMT given its concentrated exposure. The trust's diversified portfolio of high-growth companies provides some cushion, but the near-term trajectory hinges heavily on SpaceX's performance and market sentiment.
This article is for informational purposes only and does not constitute financial advice.
