Scottish Mortgage: Trump’s deregulation could boost these shares

Donald Trump started his second term as President of the United States this week, beginning what is likely to be a volatile – but possibly very profitable – period for investors. 

While we can’t know for certain what the next four years we be like, or what the impact on shares will be, Scottish Mortgage manager Tom Slater notes that we are going to be in a “lighter-touch” regulatory environment. He says this could be good news for some of the innovation-focused shares the £12.7 billion trust invests in.  

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Slater said: “There are some areas of the portfolio where the regulatory environment of the previous administration had made doing business extremely difficult. But we are already seeing the impact of changing expectations.” 

Slater says that Elon Musk’s SpaceX, which is now SMT's largest holding at 7.5% of the portfolio, falls into this category. For example, he notes that SpaceX’s Starship launch was delayed because of risk assessments, such as if the rocket would land on sharks, as well as having to test the impact of sonic booms on seals and nesting birds. 

“There was almost a deliberate wilfulness to ignore the bigger picture. So, we should start to see the launch cadence at SpaceX pick up,” he said.   

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Slater also said the crypto industry could benefit from less regulation under the new government. Scottish Mortgage has a small unlisted holding in Blockchain.com.  

“The crypto industry was targeted from various directions by the previous administration, whether that was regulatory demands that were impossible to comply with - it was a maze of state-led regulation without any federal consistency - or the slightly more sinister attempts to remove banking access from the industry, life has been very difficult,” the fund manager said.  

But Slater says that the picture is now changing very quickly and the previous downturn exposed fraudulent cryptocurrency players and they have now been driven out of the market. 

“The crypto industry spent more on lobbying in the election than the oil & gas and farming industries, and I think measures to increase legitimacy are likely to follow. Over 20% of the US population owns some bitcoin. Blockchain.com now has the chance to grow meaningfully,” he said.  

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Autonomous transport is another sector that Slater thinks could perform well under Trump. 

“The prospect of autonomy has been around the corner for some time. I think people have got a little bit jaded from the over-promising and under-delivery. 

“However, that's now changing pretty quickly. Google's Waymo is doing about 10,000 commercial rides a day in San Francisco. That gives it about 22% of the rideshare market there.  

“We're anticipating the commercial launch of autonomous trucking from our holding in Aurora Innovation in the first half of this year. And we're also expecting the commercial launch of Zipline’s autonomous drone deliveries in Dallas in the first half of this year,” Slater said.  

He also says that Tesla is launching a “Cybercab” and is seeing “huge” improvements in its Full Self-Driving (FSD) technology. 

Despite the good outlook for Tesla, Slater revealed that Scottish Mortgage sold about £650 million of Tesla stock in the fourth quarter of 2024. As of the end of last year, it now just accounts for 2% of the portfolio.  

“The value of the company has increased by £500 billion in the past few months, in the absence of really any fundamental news,” he said. 

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Despite positive noises coming out of the new US government, Slater stresses that he does not know what the impact of the incoming administration is going to be. 

“And even if I did know, I couldn't tell you what that was going to do to the stock market,” he adds.  

Scottish Mortgage shares have risen 39% in the past 12 months, including an 8% jump so far in 2025. They trade at around a 10% discount to their net asset value.