Harvard endowment gained 27.1% in a year of SpaceX and AI gains for universities

Harvard University's endowment returned 27.1% in fiscal year 2026 and was valued at $68 billion on June 30, the university said in its annual financial report.

It is one of a string of strong showings across higher education, where positions in SpaceX and AI-linked investments have been key contributors, according to The Wall Street Journal. The University of North Carolina system returned 37.8%, Washington University in St. Louis returned 37.3% and Stanford returned 31.7% in its main investment vehicle. The Massachusetts Institute of Technology gained 10.3%.

"You either had SpaceX or you didn't," Greg Dowling of Fund Evaluation Group — an advisory firm that counts endowments among its clients — told the Journal.

Harvard disclosed in an August regulatory filing that it held a $2.2 billion direct stake in SpaceX as of June 30, according to the Journal. N.P. "Narv" Narvekar, CEO of Harvard Management Company, wrote that this year's return came primarily from venture capital, public equities and hedge funds, according to The Harvard Crimson. "This was an exceptional year, at an important moment," Narvekar wrote in his annual letter, according to the Journal.

Harvard ended the fiscal year with an operating surplus of $100 million on $6.7 billion in revenue, a 1.5% margin. Revenue was largely unchanged, and expenses fell more than 2%. The endowment distribution was $2.6 billion, a share of operating revenue that approached 40%.

The university said it smooths distributions, so strong investment returns support operations gradually through future payouts and do not create immediate flexible resources.

Starting in fiscal year 2027, the federal excise tax on Harvard's net investment income will rise from 1.4% to 8%. Harvard estimates the higher rate will cost roughly $300 million a year. The amount will vary with market performance and would be several times larger in a year with returns like this one, the university said.

Sectorwide, preliminary Cambridge Associates data put the median return for U.S. college and university endowments at 16.1% for the fiscal year, according to the Journal. A standard reference portfolio — 70% global equities and 30% high-quality U.S. bonds — posted a 17.9% gain over the same period.

The University of Virginia's endowment returned 27%, with a SpaceX stake the school had accumulated during 2020 and 2021 playing a significant role, according to the Journal. Robert Durden of the endowment wrote in his annual letter that such returns "are rare by historical standards," and that the endowment holds "measured expectations for the years ahead."

SpaceX debuted on the Nasdaq $NDAQ in June in an offering designed to raise $75 billion at a valuation of $1.77 trillion.