Ray Dalio Sounds the Alarm on an AI Bubble — But His Portfolio Tells a Very Different Story

AI stocks have hit a rough patch in recent weeks. Some have plunged sharply, others have flattened out, and the consensus across Wall Street is shifting toward a new fear: the entire AI sector might be inflated beyond reason. Billionaire Ray Dalio, founder of Bridgewater Associates, agrees that a bubble is forming — but he believes we’re only about “80%” of the way to the extreme euphoria seen during the 1929 crash and the dot-com peak of 2000.

Dalio says the bubble still hasn’t been “pricked,” which means it may keep inflating unless a real negative catalyst surfaces. Fear alone isn’t enough to stop the rally, he warns. Because of that, he advises investors not to dump their holdings purely because valuations look stretched. In his words, the bubble is present — but the pin hasn’t shown up yet.

His own portfolio moves, however, reveal how he’s navigating the moment. Bridgewater’s latest 13F filings show that while Dalio is still buying equities overall, he has been sharply reducing exposure to some of the biggest AI semiconductor names. He cut his Nvidia stake by 65.38%, slashing his position from 4.72 million shares to 2.51 million. He also reduced his Broadcom holdings by 26.68%, trimmed Alphabet by 52.61%, and nearly halved his Meta position by 48.34%.

But Dalio isn’t retreating from the market — he’s recalibrating. He dramatically increased his position in the iShares Core S&P 500 ETF (IVV) by 75.31%, making it Bridgewater’s largest holding at $2.71 billion. He also continued building positions in companies that allow him to remain exposed to AI innovation while avoiding the most overextended valuations. His Salesforce stake climbed 22.41%, his Lam Research position more than doubled, and his Adobe holdings jumped over 73%.

The result is a clearer picture of Dalio’s strategy: he’s rotating out of hyperscalers and mega-cap AI stars while leaning into more specialized AI and tech names — all without stepping away from equities. Bridgewater remains a net buyer.

Dalio’s message to investors is simple: don’t panic. Even in a bubble, selective repositioning can unlock long-term upside. And if the broader market keeps climbing, AI leaders like Nvidia may still have room to run — right up until the moment the bubble finally meets its pin.