Scottish Mortgages 19.3% SpaceX Bet|Can an 81bn Beat Justify a 1.75trn Dream?

The Session That Could Not Decide What Nvidia Was Worth

Nvidia posted $81.6bn in revenue for the first quarter — up 85 per cent year on year, beating Wall Street's forecast of $78.9bn by more than two and a half billion dollars. Net income came in at $58.3bn. Adjusted earnings per share hit $1.87. And then the shares slipped.

That slip matters more than the numbers do. Nvidia has now beaten Wall Street's quarterly estimates in 18 of the last 20 reporting periods. Each time the bar rose. This quarter the bar rose again — and the company cleared it — yet after-hours sellers still moved first. The market is no longer asking whether Nvidia can beat. It is asking whether beating is enough.

At the centre of this question, for UK investors, sits a single trust. Scottish Mortgage holds SpaceX at a valuation of $1.25 trillion, a stake representing 19.3 per cent of total assets as of 31 March. On 18 May, the trust sold 1.7 million treasury shares — a move that signals the managers are using the SpaceX halo to raise fresh capital. That is confidence. But the financials SpaceX just disclosed ahead of its planned Nasdaq listing told a different story: a $4.94bn net loss in 2025 on revenue of $18.67bn, followed by a first-quarter 2026 loss of $4.3bn on just $4.7bn in sales.

The market is currently pricing SpaceX at $1.75 trillion for its IPO — forty per cent above where Scottish Mortgage itself values the holding. If the IPO price is confirmed at that level, Scottish Mortgage's net asset value rises. If the public market recoils at the loss figures, the trust's largest single position reprices downward in real time, on a public exchange, with no ability to manage the exit quietly.

That gap between a $1.25 trillion internal valuation and a $1.75 trillion IPO ask is the number this session leaves unresolved.

Why the Loss Figures Do Not Kill the Thesis — and Why They Might

The mechanism behind Nvidia's after-hours dip is the same mechanism that makes SpaceX's loss figures complicated rather than disqualifying. Both companies are priced on the assumption that capital destruction today produces infrastructure monopoly tomorrow. Nvidia's data centre division generated $75.2bn in revenue — 92 per cent of total sales — as Microsoft, Amazon, Meta and Google continued pouring hundreds of billions into AI infrastructure. Jensen Huang described demand as having "gone parabolic." The company guided for second-quarter revenue of $91bn and announced an $80bn share buyback. These are not the actions of a business under pressure.

But the after-hours sell-off exposed a structural shift in how the market is reading AI infrastructure spend. Several of Nvidia's largest customers are now developing their own custom chips. Amazon, Google, Microsoft and Meta each have internal silicon programmes designed to reduce dependence on Nvidia hardware. Nvidia itself acknowledged in regulatory filings that some customers are building products "optimised for certain workloads" that may not require its highest-end systems. The company has also largely conceded the Chinese AI market to Huawei, and is not including any data centre compute revenue from China in its current-quarter guidance.

This is the condition under which the thesis breaks: not a demand shortfall, but a customer defection that accumulates slowly enough that quarterly numbers keep beating even as the moat narrows.

For Scottish Mortgage, the SpaceX loss figures feed the same logic in a more acute form. Starlink generated $11.38bn of the $18.67bn in 2025 revenue — it is the only division currently earning its keep. The remainder of the business is being consumed by spending on xAI data centre infrastructure, Elon Musk's separate venture, which is drawing capital through SpaceX's balance sheet. A UK investor holding Scottish Mortgage is therefore indirectly funding an AI infrastructure bet inside a rocket company, priced at a level that assumes the infrastructure bet pays off before the cash runs out.

Jamie Dimon, speaking on Thursday, said AI "will reduce jobs down the road" in banking — adding that JP Morgan would be "hiring more AI people and fewer bankers in certain categories." Standard Chartered has already announced plans to cut almost 8,000 back-office roles. HSBC's chief executive Georges Elhedery warned staff not to fight the transition. Each of these announcements is framed as efficiency. But each one also represents a capital reallocation decision — money moved from human labour toward the infrastructure that Nvidia sells and SpaceX is attempting to build. The demand signal for AI compute is not slowing. The question is who captures the margin from that demand.

What the Nvidia Slip and the SpaceX Listing Are Both Trying to Settle

The unresolved question from the paradox layer is this: if demand for AI infrastructure is genuinely parabolic, why is the marginal dollar of Nvidia earnings being valued at less than the prior dollar? And if that discount is real, what does it imply for a SpaceX IPO priced at a forty per cent premium to Scottish Mortgage's own estimate?

The historical parallel is 2021. In the fourth quarter of that year, US technology companies were posting record earnings while their share prices began the derating that would erase roughly a third of the Nasdaq's value over the following twelve months. The derating did not begin because the earnings disappointed. It began because the market decided the rate of growth was the ceiling rather than the floor — and that the capital required to sustain it had been underpriced. Nvidia's data centre revenue growing 92 per cent is extraordinary. But the guide of $91bn for next quarter implies growth is decelerating from 92 per cent toward something lower. The direction matters as much as the level.

For Scottish Mortgage specifically, the verification benchmark is the SpaceX IPO price. If the listing proceeds at $1.75 trillion or above, the trust's net asset value rises by a calculable amount, and the 19.3 per cent concentration becomes a source of outperformance. If the IPO is delayed, repriced below $1.25 trillion, or if the public market marks SpaceX down in the weeks following the listing, the trust faces a visible markdown on its single largest position — one that cannot be managed through private-market valuation opacity.

The continuation condition is straightforward: Nvidia's $91bn second-quarter guide hits or beats, SpaceX lists near $1.75 trillion, and the xAI data centre spending narrative holds as a growth driver rather than a drain. Under that scenario, Scottish Mortgage's concentration is justified, and the AI infrastructure trade remains intact across both public and private markets.

The breakdown condition is more specific: if one or more of Nvidia's hyperscaler customers announces a meaningful reduction in external chip procurement — citing internal silicon readiness — the derating logic accelerates. That announcement does not need to come this week. It needs to come before the SpaceX IPO lock-up expires. Because Scottish Mortgage cannot exit quietly from a $1.25 trillion holding once SpaceX is publicly traded and the position is marked to market daily.

The question the session leaves open is whether the Nvidia slip was a one-day pricing adjustment or the first move in a longer recalibration of what AI infrastructure spend is actually worth to the companies funding it — and whether Scottish Mortgage's managers sold those 1.7 million treasury shares on 18 May because they believe the IPO will confirm the valuation, or because they wanted the capital before it is tested.