Ray Dalio Warns Market Bubble Is Approaching 1929 and Dot-Com Extremes

Ray Dalio is sounding one of his strongest warnings yet about the U.S. stock market.
The Bridgewater founder says today’s AI-driven boom is showing the classic characteristics of a financial bubble and is approaching the extremes seen before the crashes of 1929 and 2000.
Valuations underline the concern.
The S&P 500’s cyclically adjusted price-to-earnings ratio, or CAPE, recently reached roughly 41.
That is well above the 32.6 level recorded at the September 1929 peak and approaching the 44.2 record reached during the Dot-Com Bubble.
Dalio argues that transformative technologies can create enormous real economic value while simultaneously generating speculative excess as investors price in future growth far ahead of actual cash flows.
AI may be revolutionary.
But history shows that revolutionary technologies and financial bubbles can exist at the same time.
The danger comes when investors eventually need to turn rapidly rising paper wealth into actual cash — and discover that the valuations cannot all be realized at once.