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Gotrade News – Notable voices are warning about AI bubble and market-top risks in US stocks. Ray Dalio and Bank of America led the caution this week.
The warnings arrive as technology valuations keep climbing higher. Yet the signals are mixed, so investors should weigh risk in a measured way.
According to The Motley Fool, Dalio said all great technological changes create bubbles. He added that high valuations do not guarantee a profitable investment.
Even so, his Bridgewater fund added to AI positions during the first quarter. The portfolio holds Amazon, Alphabet, Microsoft, plus three infrastructure names.
Those infrastructure names include Nvidia (NVDA) and Broadcom (AVGO), two key chip suppliers. The Nvidia stake reportedly rose 20 percent, while the Broadcom position climbed more than 50 percent that quarter.
The additions came as major cloud providers commit roughly 580 billion dollars in combined capital spending this year. That enormous outlay continues to support near-term demand for high-end AI chips and equipment.
On the other side, Bank of America highlighted valuation risks that it argues keep stacking up across markets. Its strategist, Savita Subramanian, advised clients to take profits gradually at current price levels.
As reported by CNBC, roughly 70 percent of the firm’s bear-market signals have now triggered. That elevated level reportedly mirrors conditions seen near several previous market peaks.
The S&P 500 looks statistically expensive on 17 of its 20 tracked valuation measures. The gap between the best and worst tech stocks sits at the widest level since February 2000.
That valuation pressure also shadows broad funds like the Invesco QQQ Trust (QQQ). The ETF tracks the technology-heavy Nasdaq 100 index, where large tech names dominate.
Still, financial advisors argue the current picture looks far less dire than the dotcom era. They cite steadier corporate profit margins and capex funded largely through free cash flow rather than debt.
Per InvestmentNews, the Nasdaq 100 climbed 10.6 percent during the month of May 2026. Advisors broadly favor disciplined diversification over any sharp, panicked reaction to the headlines.
Some advisors stress that this era’s capital spending is funded by internal cash, not heavy borrowing. That clearly distinguishes it from the aggressive debt-fueled buildout seen just before dotcom peaked.
They also emphasize how genuinely hard it is to time a bubble’s burst with any consistency. The focus therefore stays on firms with real profits today, not distant growth promises alone.
The signals worth watching are slowing demand or meaningful downward revisions to earnings forecasts. A sharp deceleration from here could make today’s stretched valuations difficult to sustain.
For long-term investors, a sensible step is weighing individual position sizes carefully and deliberately. Periodic rebalancing helps manage concentration risk without exiting the equity market entirely.
The core message is measured caution, not a guaranteed market crash. Even the bubble-warners themselves still hold large AI positions.
Disclaimer
Gotrade is the trading name of Gotrade Securities Inc., which is registered with and supervised by the Labuan Financial Services Authority (LFSA). This content is for educational purposes only and does not constitute financial advice. Always do your own research (DYOR) before investing.
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Rendy Andriyanto
Jun 10, 2026
Rendy Andriyanto
Jun 10, 2026
Rendy Andriyanto
Jun 10, 2026
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1 Returns reflected are cumulative returns from 5 Mar 2020, 5 Mar 2019, 5 Mar 2018 & 3 Mar 2017 till 4 Mar 2021 for 1 year, 2 years, 3 years & 4 years respectively with the exception of Spotify which reflect the cumulative returns from 5 Mar 2020 & 5 Mar 2019 till 3 Mar 2021 for 1 year & 2 year respectively.
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