Ray Dalio says markets are in a bubble but India might be the twist no one is ready for
Despite the red flags, investors poured back into AI trades after Nvidia posted earnings that crushed expectations. The stock jumped over 5 percent. CEO Jensen Huang dismissed bubble concerns entirely, telling analysts, “We see something very different.”
- Nov 22, 2025,
- Updated Nov 22, 2025 7:26 AM IST
Nvidia’s explosive earnings have reignited a full-blown AI stock rally, but billionaire investor Ray Dalio says the euphoria is dangerously misplaced, warning the market is now “in that territory of a bubble” and primed for disappointment.
In a sharp warning on CNBC’s Squawk Box, Bridgewater founder Ray Dalio said investors are ignoring the warning signs as artificial intelligence spending pushes markets into extreme territory.
“Don’t sell just because there’s a bubble,” Dalio cautioned. “But if you look at the correlations with the next 10 years’ returns, when you are in that territory, you get very low returns.” He stressed that bubbles do not burst on their own and said a market trigger has not yet emerged. Still, he flagged wealth taxes — not interest rates — as a looming threat that could rattle markets.
Despite the red flags, investors poured back into AI trades after Nvidia posted earnings that crushed expectations. The stock jumped over 5 percent. CEO Jensen Huang dismissed bubble concerns entirely, telling analysts, “We see something very different.”
But the rally is fueling a level of optimism that some warn is reckless. The Nasdaq Composite is now up nearly 17 percent this year, driven by megacap tech names and AI mania that continues to detach from fundamentals.
The turbulence is spreading. In India, tech market volatility is accelerating. “Nasdaq closed down 2.15 percent yesterday, crashing 4.4 percent from the intraday peak,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “This kind of movement is a signal of more volatility in store.”
Vijayakumar acknowledged the deep divide forming in global markets. “There are valuation concerns in AI stocks… but Nvidia’s CEO disagreed with this cautionary warning with the statement ‘we see a different picture.’”
He said India, which has underperformed in the AI rally, could gain from a shift in investor flows. But any serious correction would not spare emerging markets. “A big crash would impact all markets,” Vijayakumar warned. “So wait and watch how things unfold.”
Nvidia’s explosive earnings have reignited a full-blown AI stock rally, but billionaire investor Ray Dalio says the euphoria is dangerously misplaced, warning the market is now “in that territory of a bubble” and primed for disappointment.
In a sharp warning on CNBC’s Squawk Box, Bridgewater founder Ray Dalio said investors are ignoring the warning signs as artificial intelligence spending pushes markets into extreme territory.
“Don’t sell just because there’s a bubble,” Dalio cautioned. “But if you look at the correlations with the next 10 years’ returns, when you are in that territory, you get very low returns.” He stressed that bubbles do not burst on their own and said a market trigger has not yet emerged. Still, he flagged wealth taxes — not interest rates — as a looming threat that could rattle markets.
Despite the red flags, investors poured back into AI trades after Nvidia posted earnings that crushed expectations. The stock jumped over 5 percent. CEO Jensen Huang dismissed bubble concerns entirely, telling analysts, “We see something very different.”
But the rally is fueling a level of optimism that some warn is reckless. The Nasdaq Composite is now up nearly 17 percent this year, driven by megacap tech names and AI mania that continues to detach from fundamentals.
The turbulence is spreading. In India, tech market volatility is accelerating. “Nasdaq closed down 2.15 percent yesterday, crashing 4.4 percent from the intraday peak,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “This kind of movement is a signal of more volatility in store.”
Vijayakumar acknowledged the deep divide forming in global markets. “There are valuation concerns in AI stocks… but Nvidia’s CEO disagreed with this cautionary warning with the statement ‘we see a different picture.’”
He said India, which has underperformed in the AI rally, could gain from a shift in investor flows. But any serious correction would not spare emerging markets. “A big crash would impact all markets,” Vijayakumar warned. “So wait and watch how things unfold.”