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Why do I own Scottish Mortgage (LSE: SMT) shares? The main reason is that the investment fund boasts a stellar track record of picking early-to-mid-stage growth stocks with disruptive potential. Past winners include SpaceX (bagging an estimated 20x return), Nvidia (a 25x return) and Tesla (a mind-boggling 100x return).
This enviable performance is why Scottish Mortgage is one of the most talked-about funds on the London Stock Exchange. But with its portfolio publicly available, we don’t need to open a position to take a sneak peek at which might be the hyperscalers of tomorrow. Here are three of those stocks I think could have great things ahead of them.
In the future
Zipline specialises in drone deliveries. That is, using flying drones to drop fast food packages or online orders into customers’ backyards. Sound pretty far-fetched? Well, the firm has already completed 2m of these deliveries, getting its feet wet by landing care packages in danger zones in Africa.
There’s a long way to go before the firm justifies its estimated $20bn valuation — not least getting regulatory approval to fill a city airspace with delivery drones. But with the company still pre-IPO, Scottish Mortgage offers a chance to get exposure to a technology we might see a lot more of in the future.
Another exciting stock in the portfolio is artificial intelligence (AI) company Anthropic, which makes the Claude language model. Anthropic’s enterprise focus has paid off, having the most market share of any enterprise AI.
The firm’s also private, but is expected to have its IPO later this year which could see its value hit the $2trn mark or higher. Though the frequent concerns of an AI stock market crash do pose a risk to one of the main players in the technology.
Worth considering?
The portfolio does include publicly-listed companies too. One interesting one is electric vehicles (EV) maker BYD. The Chinese car firm has surpassed Tesla to be the leading EV firm in terms of sales (including hybrids). The share price has risen too, up five times in value since 2020.
While state interference can be a drawback for Chinese companies, this is another growing company in a growing sector. I imagine we’ll see some big winners as the green revolution continues apace, and BYD is well-positioned to be among them.
It’s worth saying that growth stocks come with their own risks. For example, the US recently raised interest rates and markets are expecting up to another three rate hikes. This costlier borrowing could hit these type of growth stocks that rely on investment while they’re on the road to making a profit.
The stock market will, however, always have plenty of opportunities for investors to buy into great companies early on. Scottish Mortgage is one way of doing that with exposure to certain private companies added on too. I think the fund’s worth a look.
Should you invest £5,000 in Scottish Mortgage Investment Trust Plc right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie 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 Investment Trust Plc made the list?
John Fieldsend owns shares in Scottish Mortgage, Nvidia, Tesla and SpaceX.
This story originally appeared on Motley Fool
