AI stocks have been going through a troubling period in the past few weeks. Some have cratered, whereas others are plateauing as Wall Street believes that the entire sector is now in a bubble.
Bridgewater Associates founder, billionaire Ray Dalio, shares the same view. However, there's a distinction. According to Dalio, the market is in bubble territory, but he reckons that we're at "80%" of the euphoria seen in 1929 and in 2000. He also says that the bubble "needs to be pricked," meaning that the broader market may keep rallying if there's no negative catalyst to cool things down. Fear alone may not end the rally.
Hence, he recommended investors not to sell “just because there's a bubble.” His justification is that "...we don't have the pricking of the bubble yet."
How Dalio is Playing AI
The answer to this may be in Ray Dalio's own portfolio. Bridgewater Associates' 13F revealed that while he did stock up on certain stocks and ETFs, he heavily offloaded many AI semiconductor stocks. Dalio sold 65.38% of his Nvidia (NVDA) holdings, reducing shares owned from 4.72 million to just 2.51 million.
He also trimmed his Broadcom (AVGO) holdings by 26.68% and more than halved his Alphabet (GOOG) (GOOGL) stake by 52.61%. His Meta Platforms (META) holdings were nearly halved, too, down 48.34%.
At the same time, he increased his iShares Core S&P 500 ETF (IVV) stake by 75.31% to $2.71 billion. This is now his biggest holding. He increased his Salesforce (CRM) stake by 22.41% and more than doubled his Lam Research (LRCX) holding. Dalio's Adobe (ADBE) stake was boosted by over 73%.
What this shows is that he's trimming his hyperscaler holdings and is leaning into more specialized AI stocks. Bridgewater Associates remains a net buyer of stocks.
What Does Dalio Want You to Do Now?
Dalio likely wants investors not to panic sell just because there is a bubble. It might be a better idea to follow what he is doing and rearrange certain holdings instead. Even in this bullish environment, there are still stocks trading at a discount with plenty of upside potential.
And if the broader market keeps rallying in earnest, stocks like NVDA can keep delivering gains until the bubble is "pricked," as Dalio describes it.
If you are a strong believer in Dalio, the smartest idea would be to follow his actions instead of his statements. Bridgewater Associates has been taking profits on NVDA stock and many other similar names. You can do the same and rotate those gains into ETFs or other assets to diversify your portfolio.
Having said that, Dalio has been a frequent trader of Nvidia. He has been selling and buying NVDA stock frequently. He sold for four consecutive quarters: Q2 2024, Q3 2024, Q4 2024, and Q1 2025, before buying back in earnest in Q2 2025 and then selling again in Q3 2025.
Nvidia's Q3 earnings were stellar, so his recent comments may be a hint that he has actually bought back in. Bridgewater's Q4 2025 13F report will confirm whether that is the case.
What Most Analysts Say About NVDA Stock
Analysts remain bullish on Nvidia, even more so than they were in the recent past. 44 out of 47 analysts give NVDA stock either a "Moderate Buy" or a "Strong Buy" rating.
The average price target is at $252.35, implying over 38% upside potential from here. NVDA stock is trading at a discount after a 14% fall from its peak, so there's indeed more room to run. Catalysts like more rate cuts or "$2,000 tariff dividend" checks can make that happen. But again, being cautious is a better idea if you are not particularly bullish on AI.
