{"id":303937,"date":"2025-11-20T21:23:12","date_gmt":"2025-11-20T21:23:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/303937\/"},"modified":"2025-11-20T21:23:12","modified_gmt":"2025-11-20T21:23:12","slug":"nvidia-turns-negative-after-ray-dalio-warns-the-latest-market-boom-is-a-big-bubble-with-big-wealth-gaps-poised-for-a-politically-explosive-bust","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/303937\/","title":{"rendered":"Nvidia turns negative after Ray Dalio warns the latest market boom is a ‘big bubble with big wealth gaps’ poised for a politically explosive bust"},"content":{"rendered":"

The stock market\u2019s early rally fizzled by the afternoon, with the S&P 500 swinging from a nearly 2% gain to a slight selloff by midday. Nvidia<\/a>, which initially jumped after reporting strong earnings, reversed 1% into the red along with the rest of the megacap AI trade.<\/p>\n

The broader market mood wasn\u2019t helped by mixed economic data <\/a>and uncertainty<\/a> around the Federal Reserve\u2019s next move, especially after a cancelled jobs report <\/a>and signs of uneven labor-market conditions. And then, there\u2019s Ray Dalio.<\/p>\n

The billionaire founder of Bridgewater Associates warned in a CNBC interview<\/a> Thursday that investors are misreading the underlying mechanics of today\u2019s rally, even as AI giants like Nvidia insist the boom is nowhere near finished.<\/p>\n

\u201cThere is definitely a bubble in markets,\u201d Dalio said, adding that while the situation doesn\u2019t perfectly match 1929 or 1999, the indicators he tracks show the U.S. is closing in fast.<\/p>\n

\u201cThe picture is pretty clear,\u201d he said. \u201cBut we don\u2019t have the pricking of the bubble yet.\u201d And, crucially: \u201cA lot can go up before the bubble bursts.\u201d<\/p>\n

Dalio\u2019s comments landed just as Nvidia reported one of the most astonishing quarters in corporate history. The chipmaker announced<\/a> a staggering $57 billion in revenue in the third quarter, up 22% from the prior quarter and 62% from a year earlier, and reaffirmed it has roughly $500 billion in AI-chip demand already lined up for the rest of 2025 and 2026. Data center revenue alone hit $51.2 billion, up 25% sequentially and 66% year-over-year, powered by \u201coff the charts\u201d demand for its new Blackwell GPUs. On top of that, Nvidia issued guidance of\u00a0 $65 billion in revenue next quarter, plus or minus 2%, signaling that its AI spend is nowhere near rolling over.<\/p>\n

CEO Jensen Huang used the attention during his earnings call to dismiss bubble fears outright.\u00a0<\/p>\n

\u201cWe see something very different,\u201d he told analysts, arguing that demand for AI compute isn\u2019t tied to any single trend but three simultaneous revolutions: non-AI software shifting to accelerated computing, the explosion of new generative AI apps, and \u201cagentic AI\u201d that operates without user prompts.\u00a0<\/p>\n

But Dalio is looking past Nvidia\u2019s fundamentals to what he sees as the fragile architecture of the broader market. In a lengthy essay<\/a> released the same day on X<\/a>, he argued that bubbles don\u2019t burst simply because valuations are too high. They burst when investors suddenly need money to cover debts, taxes, or liquidity requirements, but are forced to sell assets to get it. That forced selling, not bad earnings or shifting sentiment, is what historically drives the cascade, Dalio argued.<\/p>\n

\u201cFinancial wealth is of no value unless converted into money to spend,\u201d he wrote.<\/p>\n

Today, Dalio said, that vulnerability is amplified by extreme wealth concentration. The top 10% of Americans now hold nearly 90% of all equities, and they account for roughly half of all consumer spending. Their strength has masked the deterioration on the lower half of the income ladder, creating what economists widely describe as a K-shaped economy<\/a>, one where high-income households surge ahead while everyone else slips further behind.<\/p>\n

Moody\u2019s Analytics chief economist Mark Zandi recently found<\/a> that the wealthiest households are driving nearly all consumption growth, while lower-income Americans are pulling back under the pressure of tariffs, high borrowing costs, and rent inflation. Morgan Stanley<\/a> Wealth CIO Lisa Shalett described the inequality as \u201ccompletely wackadoo,\u201d noting that spending among rich households is expanding six to seven times faster than for the lowest cohort. Even Federal Reserve Chair Jerome Powell acknowledged the divide, saying companies report \u201ca bifurcated economy\u201d where upper-income consumers continue to spend while others trade down.<\/p>\n

It\u2019s in this environment, Dalio argues, that bubble dynamics become especially dangerous. Margin debt is already at a record $1.2 trillion. California is considering<\/a> a one-time 5% wealth tax on billionaires, exactly the kind of political shock that could force mass liquidations. Monetary tightening is another classic trigger.\u00a0<\/p>\n

\u201cA tightening of monetary policy is classic,\u201d Dalio said. \u201cBut also something like wealth taxes can happen.\u201d<\/p>\n

Still, Dalio isn\u2019t telling investors to abandon the rally. Bubbles can keep rising far longer than skeptics expect, he said, and can deliver enormous gains before they crack. His message is simply that investors need to understand the risks, diversify, and hedge\u2014he specifically cited gold, which has hit all-time highs<\/a> this year\u2014as markets move deeper into unfamiliar territory.<\/p>\n

Both Dalio\u2019s warning and Nvidia\u2019s 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\u2014easy credit, concentrated wealth, and vulnerability to liquidity shocks\u2014are tightening, too.<\/p>\n

As he put it: \u201cI want to reiterate, a lot can go up before the bubble bursts.\u201d<\/p>\n

\u201cThese circumstances have, throughout history, led to great conflicts and great transitions of wealth,\u201d Dalio wrote.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"The stock market\u2019s early rally fizzled by the afternoon, with the S&P 500 swinging from a nearly 2%…\n","protected":false},"author":2,"featured_media":303938,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[157906,70488,28,103335,7067,160,11379,112,4321,29243,2714],"class_list":["post-303937","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-bridgewater-associates","tag-bubbles","tag-business","tag-income-inequality","tag-inequality","tag-investors","tag-jensen-huang","tag-markets","tag-nvidia","tag-ray-dalio","tag-valuations"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/303937","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=303937"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/303937\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/303938"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=303937"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=303937"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=303937"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}