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Seraphim Space Investment Trust (LSE:SSIT) was a penny share that was trading at 29p just over two years ago. But after benefitting from the recent space-tech boom, the trust has escaped penny-stock territory, and now sports a 114p share price and £270m market cap.
A 109% surge puts Seraphim’s year-to-date performance ahead of both Rolls-Royce (102%) and Nvidia (40%). So it has proven to be a hidden gem for eagle-eyed investors.
Let’s take a look at this under-the-radar trust to see whether it might be set up for further gains in 2026.
Surging space sector
Seraphim is a unique investment trust that targets early and growth-stage space technology companies. These have “the potential to dominate globally and help tackle humanity’s most pressing challenges like climate change, communications, mobility and global security“.
As rocket companies like SpaceX dramatically lower the cost of accessing space, more satellites are being deployed. This is creating various commercial opportunities. Indeed, the trust says it filters through around 70 opportunities per month!
Another massive trend playing out is rising global defence spending, particularly among NATO members. And space tech is becoming a priority for many governments and defence contractors.
According to research provider QuotedData, $10.4bn was raised by the sector in the third quarter of 2025 (a near record).
The portfolio
Seraphim’s portfolio contains around 26 companies, with many having dual-use technologies that can serve both commercial and defence markets.
The top five holdings in June were ICEYE (Earth observation), D-Orbit (in-orbit services), ALL.SPACE (ground terminals), HawkEye 360 (Earth observation), and LeoLabs (data platform).
LeoLabs operates a network of ground-based radars that track satellites and space activity in low Earth orbit. Given the rising number of satellites in orbit, firms that help prevent space debris from colliding are increasingly relevant.
However, the standout performer in the portfolio has been ICEYE. This Finnish firm operates a constellation of specialised satellites that provide high-resolution images of the Earth’s surface. Unlike traditional camera satellites, the firm’s technology can see through clouds, smoke, and total darkness to track activities in real time.
Just before Christmas, ICEYE and defence giant Rheinmetall signed a €1.7bn contract with the German army to provide space-based reconnaissance data. The deal is expected to run for five years, with an option to be extended.
It should result in a significant uplift in ICEYE’s valuation, which was already €2.4bn at its last financing round in September. The news sent Seraphim stock surging above 100p for the first time since April 2022.
What about 2026?
The flip side to ICEYE’s ballooning valuation is that it now makes up over a third of the portfolio. So if anything went wrong at the satellite maker, it would have an outsized negative impact on Seraphim’s net asset value (NAV).
Speaking of which, the previous chunky NAV discount has narrowed to 4.6%. So it now seems far less of a bargain than in mid-2023 when the discount was near 70%.
Nevertheless, I still think the stock deserves closer attention. In 2026, SpaceX is expected to go public at some mammoth valuation, potentially tempting some of Seraphim’s private holdings to also list (including ICEYE). This could see it crystalise gains, as happened in 2025 with AST SpaceMobile.
As such, I remain optimistic about the stock in 2026, and it’s on my radar.
