Ray Dalio Says This Is When the Artificial Intelligence (AI) Bubble Could Pop

Ray Dalio says an AI stock bubble could pop as interest rates rise further, and that point is approaching but not imminent. He warned that companies are taking on growing debt to fund AI initiatives, even top tech firms with strong free cash flow, at a time when the Fed has raised rates for the first time in three years. Dalio also said investors selling stocks to raise cash and lock in gains could add pressure, while rising bond yields make bonds more attractive. The article notes the State Street Technology Select Sector SPDR ETF (XLK) is up 36% year to date and about 160% over five years, versus about 80% for the S&P 500, with Nvidia, Apple and Microsoft making up close to 40% of its portfolio.

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