Ray Dalio Says AI Market Shows Signs Of Being a Bubble: ‘Nobody Can Get It Exactly Right’
Billionaire investor Ray Dalio said the artificial intelligence market is showing signs of being a bubble.
“All great technology changes produce bubbles,” Dalio told Bloomberg Television. “Nobody can get it exactly right. You have to either spend a ton of money to capture your market share and don’t worry about whether it’s too much or not, or you don’t spend enough money and you lose your market share,” he added.
The comments are in line with a recent report by CNBC that highlighted a warning sign echoing the dot-com bubble of the early 21st century.
The outlet noted that 20 companies in the S&P 500 reached their all-time highs by the end of May. That narrow participation, Bank of America strategist Michael Hartnett noted, mirrors a striking detail from March 2000, when only 20 stocks hit records at the top of the dot-com bubble.
The parallel does not mean a crash is imminent. It does, however, show how much of the market’s latest surge depends on a small group of companies tied to artificial intelligence. According to CNBC, only seven of the 20 S&P 500 companies that hit records last Friday were not directly linked to AI.
The rest were involved in chips, data centers, hardware and companies seen as essential to the next phase of computing and the industry. The Nasdaq Composite jumped 25% across April and May, its best two-month stretch since late 2002, while the S&P 500 gained about 16% in the same period.
CNBC reported that Micron Technology rose 88% in May, Advanced Micro Devices climbed 46%, Samsung gained 44%, and SK Hynix surged 81%. Micron crossed a $1 trillion valuation after a sharp rally fueled by optimism over memory demand.
Axios also reported that the AI stock boom gained momentum in May, with legacy technology names such as Cisco, Hewlett-Packard Enterprise, and Micron posting major gains as investors chased exposure to the infrastructure behind artificial intelligence. That is exactly what worries some strategists.
A healthy bull market usually broadens over time, with gains spreading across industries. A narrow rally can be fragile because indexes may continue rising even as many individual stocks fall behind. CNBC cited advance-decline lines, which track how many stocks are rising versus falling, as one sign of internal weakness.
Elsewhere, Goldman Sachs CEO David Solomon said that financial markets have moved into a period of investor “greed” as artificial intelligence companies prepare to seek billions of dollars in funding through stock sales, debt offerings, and potential initial public offerings.
Speaking with CNBC’s Leslie Picker, Solomon said the market still has enough liquidity to support major equity offerings from companies such as OpenAI, Anthropic, and SpaceX, even as the size of the expected fundraising wave raises questions about how much supply investors can absorb.
“There’s plenty of liquidity in the system if the world continues to remain as optimistic,” Solomon said. “We are definitely in a moment where there’s more greed than there is fear.”
