Perspectives on Progress #12
Hamish Maxwell – Investment Specialist
- Horizon Robotics' recent IPO and Tesla's unveiling of its Robotaxi mark significant progress on the journey to smart vehicle transformation
- Stripe acquires stablecoin platform Bridge and Blockchain.com becomes a beneficiary of a more crypto-friendly environment post-election
- Despite a recent profit warning, ASML's long-term growth potential in AI and advanced semiconductor applications remain strong
As with any investment, your capital is at risk.
Horizon Robotics
Public Market Debut
Horizon Robotics, a leading Chinese autonomous driving (AD) technology company, recently completed its Hong Kong IPO, raising circa $700m at an implied valuation of $6.7bn. Scottish Mortgage first invested in Horizon back in December 2020, and since then, we have watched the company evolve to become the "preferred partner for numerous OEMs (original equipment manufacturers) in China", according to founder and chief executive (CEO) Dr Kai Yu. Horizon has a market-leading position in China, as evidenced by all of the top 10 Chinese OEMs being customers.
Its successful listing in Hong Kong marks a critical step towards its ambition for international market expansion. Smart vehicle transformation is a megatrend reshaping the $13tn global automotive and mobility industry. The penetration of advanced driver (AD) and advanced driver assistance systems (ADAS) is now over 50 per cent in both global and Chinese markets.
Horizon's highly flexible and scalable business model and offering have enabled the company to establish a large blue-chip customer base with a stable pipeline of contracts. As demand for smart driving features grows, the market is set for significant expansion. We believe Horizon Robotics is well positioned to capitalise on this growth in Chinese and global markets, working with domestic and international OEMs.
Stripe
Crypto is Back
Stripe, the global payments giant, has moved into cryptocurrency by acquiring stablecoin platform Bridge for $1.1bn. Stripe has been increasing its focus on crypto, with co-founder John Collison declaring, "Crypto is back.” This optimism is linked to a perception of continuously improving technology, the growing stability of stablecoins (cryptocurrencies tied to stable assets like the US dollar), real-world utility and market demand.
Stripe has partnered with major players such as Coinbase and expanded its crypto services to the European Union, allowing users to purchase various cryptocurrencies using credit or debit cards. These moves demonstrate Stripe's position in the evolving landscape of digital payments and cryptocurrencies.
US President-Elect Donald Trump has signalled a more supportive regulatory environment for cryptocurrency, promising that the US will be a leader in the field.
Cryptocurrency is a form of digital money that exists only electronically and operates independently of banks or governments. It uses computer code to secure transactions on a ledger, known as blockchain technology. Its potential benefits include faster and cheaper international money transfers, increased financial privacy, and the ability to provide banking-like services to people without access to traditional financial institutions.
Scottish Mortgage first invested in Stripe in 2019. We’re excited not just by its payment efficiencies, but also by its vision to make entrepreneurship easier and thus significantly increase the amount of business conducted online.
Blockchain.com
The Future of Finance
In July, at the largest Bitcoin conference in Nashville, Donald Trump, in his capacity as keynote speaker and the Republican presidential nominee at the time, pledged to make the US the “crypto capital of the planet” and a “Bitcoin superpower”.
Following Trump's election in November, there is no doubting the crypto industry is experiencing a dramatic change of fortune, evidenced by the price of Bitcoin surging past $100,000 for the first time.
Scottish Mortgage holding Blockchain.com – the world’s oldest and most widely used platform for transacting in cryptocurrencies for both individuals and institutions – has welcomed the news that the new administration is more likely to adopt a “crypto-friendly” regulatory stance, potentially easing restrictions and fostering a more favourable climate thus encouraging innovation and investment.
Founder and CEO of blockchain.com Peter Smith stated that the election was a “victory for their industry” and noted that “crypto is not controversial”. His comment is perhaps reflected in the fact that the world’s biggest asset manager, Blackrock, recently revealed that their Bitcoin ETF reached over $40bn in assets in just 211 days. This now makes it larger than all ETFs launched in the past decade.
Smith is “optimistic about what happens next” and we look forward to providing blockchain.com continued support as the next chapter of the crypto story unfolds.
Tesla
We, Robot
Electric vehicle maker Tesla recently unveiled its long-awaited Robotaxi at its "We, Robot" event in Los Angeles (named in homage to Isaac Asimov, the American science fiction author of I, Robot).
The futuristic-looking vehicle features gull-wing doors, no steering wheel or pedals, and uses cameras and artificial intelligence (AI) for autonomous driving. Elon Musk promised production to begin by 2027 at a price point of around $30,000.
Tesla's Robotaxi business presents substantial growth potential for the company. This announcement represents a significant step towards an autonomous ride-hailing network, which could revolutionise urban transportation and significantly reduce the cost of mobility. "The autonomous future is here," Musk said. "With autonomy, you get your time back."
ASML
Recent Profit Warning
Dutch semiconductor equipment giant ASML issued a profit warning recently, lowering its 2025 revenue guidance to €30-35bn from a previous range of €30-40bn. The company cited a slower-than-expected recovery in traditional markets outside of artificial intelligence, with customers becoming more cautious and some investment plans being postponed.
While we can expect the slow recovery to continue throughout 2025, we remain excited about ASML’s long-term upside potential. Its unique position as a monopoly in the lithography industry, coupled with exponential drivers for growth in computing power, presents a compelling case for its ability to deliver solid performance in the long term. Notwithstanding the near-term profit warning, CEO Christophe Fouquet has emphasised that long-term growth drivers remain strong, particularly in AI and advanced semiconductor applications.
Unlisted investments such as private companies, in which the Trust has a significant investment, can increase risk. These assets may be more difficult to sell, so changes in their prices may be greater.
About the author - Hamish Maxwell
Investment Specialist
Hamish joined Baillie Gifford in 2017 and is an investment specialist. He joined the Scottish Mortgage Team in 2024 and works closely with the managers, meeting with portfolio companies and conducting in-depth portfolio discussions with shareholders. Alongside this, he creates engaging content which makes the Scottish Mortgage portfolio accessible to all its shareholders. Prior to Scottish Mortgage, Hamish worked on Baillie Gifford's international equities strategies alongside Lawrence Burns. Before Baillie Gifford, Hamish served in the Royal Navy as a Commissioned Officer, including time as a leader in aircraft carriers, mine-hunters, and nuclear submarines. During training, he was awarded top-of-class by HRH Prince Edward. Hamish is a CFA Charterholder, and he achieved an MBA from City, University of London where he received the EU Award.
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