The Scottish Mortgage Investment Trust (LSE: SMT) share price hasn’t exactly stood still in 2024. In fact, as I write, it’s up 16% year-to-date.

But the US Nasdaq index has gained almost twice that, at 31% since the start of 2024. It just keeps hitting all-time records. Scottish Mortgage invests heavily in Nasdaq stocks.

The result is that the investment trust shares are now trading at a 12% discount to their underlying net asset value (NAV). In effect, that means we can buy £1’s worth of the world’s top technology growth stocks for just 88p.

Don’t want growth?

Have UK investors simply not noticed what happened to Nvidia in 2024? It soared 172%, and it’s up a huge 2,100% in the past five years.

It’s fallen back a bit from the latest all-time high in early November. But we’re still looking at a market cap of $3.3trn. Oh, and Nvidia is one of the trust’s top 10 holdings. As is Tesla, which has been shooting up lately.

Bubble fears

One clear possibility is that Scottish Mortgage investors fear that the Nasdaq is overblown and heading for a fall. And there has to be a real chance of that.

The artificial intelligence (AI) mood right now has been sparkling. But there are a few voices out there suggesting it’s overheating. It does seem to me that the rocketing AI spend of 2024 has to slow, as so many companies don’t seem to know how to turn it into profit.

Does it sound like the dotcom boom of 1999? It does to me. But since then, the handful of companies that really knew how to make the internet work have soared to vastly greater valuations than even during that peak.

Valuations

Are Nasdaq stock valuations out of touch with reality? I’m not convinced they are. Nvidia is on a forward price-to-earnings (P/E) of 47, not the many hundreds we might fear. And earnings forecasts would drop that to just 25 by 2027.

Nvidia is the number one star in the AI processor market right now, so isn’t that a low valuation? A lot depends on what the competition can come up with. But it doesn’t scream overvalued to me.

And then if we look at Amazon, Scottish Mortgage’s biggest holding, we see a P/E of 44, dropping to 30 on 2026 forecasts. Again, I don’t see that as unreasonable.

Now, there’s a real danger that all these AI-driven stocks could slow dramatically in 2025. I don’t want to suggest otherwise.

Rocky ride

But don’t investors who go for this relish an exciting ride? Aren’t they happy to plonk down their cash and hope for a multibagger in the next decade or two?

Actually, some are probably like me. I’m not really a growth investor, but I like having a bit of cash in something like this that might do seriously well.

I’m happy to hold Scottish Mortgage, even with the risk. And I think I might even see some nice top-up opportunities if 2025 turns out to be as volatile as I expect.