“There is definitely a bubble in markets,” Dalio said, adding that while the situation doesn’t perfectly match 1929 or 1999, the indicators he tracks show the U.S. is closing in fast.
“The picture is pretty clear,” he said. “But we don’t have the pricking of the bubble yet.” And, crucially: “A lot can go up before the bubble bursts.”
CEO Jensen Huang used the attention during his earnings call to dismiss bubble fears outright.
“We see something very different,” he told analysts, arguing that demand for AI compute isn’t tied to any single trend but three simultaneous revolutions: non-AI software shifting to accelerated computing, the explosion of new generative AI apps, and “agentic AI” that operates without user prompts.
“Financial wealth is of no value unless converted into money to spend,” he wrote.
“A tightening of monetary policy is classic,” Dalio said. “But also something like wealth taxes can happen.”
Both Dalio’s warning and Nvidia’s triumph acknowledge that markets are accelerating in ways traditional models struggle to explain. The AI boom may well keep lifting stocks. But the bubble mechanics Dalio outlines—easy credit, concentrated wealth, and vulnerability to liquidity shocks—are tightening, too.
As he put it: “I want to reiterate, a lot can go up before the bubble bursts.”
“These circumstances have, throughout history, led to great conflicts and great transitions of wealth,” Dalio wrote.
