Billionaire Dalio warned that "we're in the bubble zone." What does he suggest we do?

Bridgewater investment firm founder Ray Dalio warned on CNBC that spending on artificial intelligence is forming a bubble in the market.

"The picture is pretty obvious: we are in the bubble zone. But we do not yet have something that can prick this bubble," the billionaire said. According to him, the role of the "needle" is not suitable for the tightening of monetary policy by the US Federal Reserve, but it could be higher taxes on wealth.

Despite the bubble forming, Dalio doesn't think it's time for investors to abandon their positions. "Don't sell just because there's a bubble," Dalio said, but added that one should not expect high returns in the long term.

According to the investor, market participants should diversify portfolios through more reliable assets like gold. This precious metal - a traditional safe haven in times of instability - has risen more than 50% this year, repeatedly hitting record highs in value.

Dalio's comments came as shares of Nvidia - a favorite in the AI market - jumped more than 5% on Thursday following better-than-expected quarterly results, CNBC noted. In a conference call following last quarter's results, Nvidia CEO Jensen Huang dismissed market participants' fears of an AI bubble, telling analysts that "what we're seeing is completely different."

The Nasdaq Composite Technology Index is up nearly 17% in 2025-fueled by growth in large-cap companies and amid continued excitement around AI.

This article was AI-translated and verified by a human editor