ByteDance tops $120 billion of half-year revenue: why it matters to Scottish Mortgage, Sofina and SoftBank

ByteDance is still growing by more than 30%, yet its profit is falling. That paradox describes the company better than TikTok's success alone: some of the financial power of its platforms is now funding an expensive race in models, chips and data centres. Scottish Mortgage, Sofina and SoftBank shareholders need to understand how that tension reaches three listed portfolios.

A media company financing AI infrastructure

ByteDance is the parent of TikTok and Douyin, its Chinese counterpart. It primarily makes money by turning attention into advertising, ecommerce, livestreaming and other digital services. Its historic advantage is recommendation technology: content is distributed according to what each user watches, rather than through an established network of friends.

The Wall Street Journal reports that ByteDance generated more than $120 billion of revenue in the first half of 2026, growing by over 30%. Net profit reportedly fell to about $20 billion, after roughly $200 billion of revenue and $42 billion of profit in full-year 2025.

These are not published accounts. ByteDance remains private and does not provide a half-year report reconciling revenue, investment and cash. The figures must therefore remain attributed to financial press reporting.

A second signal fits the same mechanism. Reuters reports that ByteDance secured a $29.6 billion unsecured loan from nearly thirty banks. The facility reportedly has an initial three-year term, extendable by two years, and will mainly support AI projects even though its legal purpose is general corporate funding.

A loan of this size does not mean ByteDance lacks revenue. It shows that the company wants to finance infrastructure today whose economic returns will arrive later. The facility equals 24.7% of half-year revenue and almost one and a half times reported half-year profit. Those comparisons show scale, not an immediate refinancing need.

Scottish Mortgage: two share classes and 4.70% exposure

Scottish Mortgage holds ByteDance through two preferred-share classes. At 31 July, one was worth £412.3 million and the other £370.9 million. Together they were worth £783.2 million, or 4.70% of Opulion gross assets at that date.

That weight makes ByteDance material to the trust's shareholders. A 10% revaluation of the holding, all else equal, would represent about £78 million, or roughly 0.47% of gross assets. This is an arithmetic sensitivity, not a forecast: the two classes may carry different rights, and their marks do not automatically follow every private-market transaction.

The lower margin adds information. TikTok, Douyin and ecommerce still appear to be growing rapidly, but more of the earnings base is financing AI. For Scottish Mortgage, future value therefore depends less on extending current revenue and more on ByteDance's ability to turn compute expenditure into profitable new products.

Sofina: ByteDance is both a direct holding and an indirect exposure

The position at Sofina is more important than a list of fund holdings suggests. At 30 June, ByteDance ranked first among Sofina Direct's ten largest investments. Sofina also states that it was the only direct asset representing more than 5% of the fair value of its look-through portfolio.

The direct position is supplemented by funds. ByteDance ranks second among the ten largest underlying companies in Sofina Private Funds, behind SpaceX. Those ten assets jointly represent 10% of the look-through portfolio, but Sofina does not publish ByteDance's individual weight in this pocket.

ByteDance is therefore not a small indirect position buried in funds. It is one of Sofina Direct's largest assets and reappears through external managers. It would be equally wrong to add a direct weight above 5% to an unknown indirect exposure: the disclosure does not provide the data.

Valuation methods also explain why ByteDance news does not move Sofina's net asset value instantly. The direct line uses market multiples with an illiquidity discount. Fund exposures depend on the latest manager reports, sometimes dated several months earlier. The same company can therefore enter the two pockets at different speeds.

SoftBank: a visible earnings contribution without a usable portfolio weight

SoftBank Group still held ByteDance through SoftBank Vision Fund 1 at 30 June. Its first fiscal quarter recorded ¥358.4 billion of gains on ByteDance, behind Intel but ahead of most other holdings in the fund.

SoftBank does not disclose a current standalone value, gross-asset weight or economic ownership percentage that would translate ByteDance's half-year figures into a reliable sensitivity. The signal is visible in earnings but incomplete in the sum of the parts.

This matters because SoftBank is simultaneously financing OpenAI, Arm, data centres and infrastructure assets. ByteDance adds another major AI exposure, but it sits in a fund vehicle rather than at the centre of the public narrative. Our analysis of SoftBank's first quarter already showed why valuation gains and cash requirements do not necessarily move together.

Two private valuations and no single price

The Wall Street Journal also reports an internal value of $241.35 per share for certain employee restricted stock units, implying a company value above $400 billion. Separate private transactions have reportedly valued ByteDance above $600 billion.

The gap is not necessarily an anomaly. An employee unit, a fund's preferred share and a secondary-market transaction can carry different rights, restrictions and dates. The figures are not a simple range from which one can select an average.

For all three investment companies, the shared question is the quality of the valuation process: which transaction is observable, what rights attach to the held security, what illiquidity discount applies and how quickly does the new reference enter net asset value?

What shareholders should retain

ByteDance is no longer simply an advertising success funded by TikTok. It is a highly profitable company choosing to reinvest more of that profitability in artificial intelligence. The lower margin may reflect deterioration, offensive investment or both. Public documentation does not yet separate the two completely.

Scottish Mortgage's exposure is measurable and large enough to move net asset value. Sofina's is even more structural, but split between a direct holding and funds whose marks update on different timetables. ByteDance has already contributed to SoftBank's earnings, while its current weight remains opaque.

The next useful article will therefore not come from another spectacular standalone valuation. It will come from reconciliation: AI investment, profit, cash flow and the fair value used by each of the three vehicles.