Baillie Gifford's Q3 2025 Portfolio Update Reveals Strategic Trimming Amidst Growth Stock Conviction

The Event in Detail

Baillie Gifford's Q3 2025 13F portfolio recorded a marginal increase, elevating its total assets under management to approximately $135 billion. The filing revealed a continued focus on large, high-conviction positions, particularly within the technology and growth sectors. The top holdings in the portfolio include NVIDIA (NVDA), MercadoLibre (MELI), Sea Limited (SE), Amazon (AMZN), and Spotify (SPOT). These five securities collectively represent close to 27% of the 13F assets, with the top three alone accounting for approximately 17%. The portfolio remains broadly diversified, encompassing around 300 securities.

Analysis of Portfolio Adjustments

Despite its status as the largest position at 6.43% of the portfolio, NVIDIA (NVDA) saw continued trimming by Baillie Gifford during Q3 2025. This move aligns with a broader strategy of harvesting gains from other high-performing assets. Notable reductions were observed in positions such as Spotify (SPOT), Shopify (SHOP), Netflix (NFLX), Ferrari (RACE), and Alnylam Pharmaceuticals (ALNY). These adjustments underscore Baillie Gifford's active management approach to its tech and growth-oriented holdings, seeking to optimize returns while maintaining core convictions.

Contextualizing Key Holdings: NVIDIA

Baillie Gifford's decision to continue trimming its NVIDIA (NVDA) stake, even as it remains the largest holding, contrasts with significant insider selling activity observed within the company. NVIDIA CEO Jensen Huang has been actively divesting shares, with sales exceeding $800 million scheduled for 2025, following prior sales of $1.5 billion between 2020 and 2024, including $713 million in 2024 alone. Reports indicate near-daily share sales by the CEO in 2025. Additionally, Director Mark Stevens recently sold over $149 million worth of shares. Notably, there have been no insider purchases reported since 2020. This divergence in behavior—institutional investors maintaining a substantial, albeit reduced, stake versus extensive insider selling—presents a complex picture for market participants evaluating NVIDIA's long-term trajectory.

Contextualizing Key Holdings: Spotify

Spotify Technology (SPOT), another key holding for Baillie Gifford, demonstrates robust fundamentals despite the firm's recent reductions. Spotify commands the largest market share in its sector, exceeding 30%. The platform boasts nearly 700 million users globally, with a significant proportion, 268 million, being paying subscribers. The average revenue per user (ARPU) for premium subscribers globally stands at approximately €4.70 monthly. Analysts project strong financial growth for Spotify, with current-year revenues expected to reach €17.2 billion and earnings per share (EPS) at €5.88. Looking ahead, revenue is projected to be €19.9 billion in 2026 and €22.6 billion in 2027, with EPS forecasted at €11.89 and €15.46 for the respective years. The mean target price for SPOT has been revised upward to US$738.05 from US$656.68, reflecting sustained analyst optimism regarding its growth prospects.

Broader Context & Implications

Baillie Gifford's Q3 2025 portfolio adjustments reflect a nuanced approach to managing its high-conviction growth investments. The continued trimming of positions like NVIDIA and Spotify suggests a disciplined strategy of profit-taking and portfolio rebalancing, rather than a fundamental shift away from these sectors. This behavior aligns with their stated philosophy of active management, particularly within technology and growth names. The contrast between Baillie Gifford's retained conviction in NVIDIA and the substantial insider selling at the company level underscores the varied perspectives on stock valuation and future growth potential within the market. For Spotify, the reductions appear to be strategic rebalancing given the strong underlying financial metrics and analyst targets, indicating that the firm may be locking in gains while still recognizing the company's long-term value.

Looking Ahead

Investors will likely monitor future 13F filings from prominent growth-oriented funds like Baillie Gifford for further insights into their allocation strategies, particularly concerning leading technology and e-commerce companies. The ongoing insider selling at NVIDIA will remain a key factor influencing investor sentiment, potentially leading to increased scrutiny of the stock's valuation and future performance, especially if it continues to diverge from institutional holding patterns. Furthermore, the performance of companies like Spotify against their robust analyst projections will be critical, as will any broader shifts in consumer spending patterns that could impact subscription-based models. These factors collectively offer valuable signals for the broader market regarding the sustainability of growth stock rallies and the long-term prospects of high-valuation companies.