Dalio: "Extremely high risk" in the next two years, a synthetic storm of AI, US Treasury bonds, and geopolitics; investors will not succeed in timing the market.
```
Bridgewater Associates founder Ray Dalio issues his latest warning: The next two years will be a “particularly dangerous period,” as debt, geopolitics, and technology form a triple storm. Most investors’ coping tactic—market timing—is destined to fail.
On April 30 local time, on the popular financial podcast “Property Markets,” Bridgewater founder and legendary macro investor Ray Dalio and D.A. Davidson’s Head of Tech Research Gil Luria shared in-depth views on the current macro cycle and tech giant earnings.
Dalio’s core conclusion was blunt: “We are on the edge. The next two to three years will be like traversing a time warp.” He specifically named the period between the U.S. 2026 midterm election and the 2028 presidential election as a “particularly dangerous period.”
Luria stated, Tech giants’ AI investments are already showing accelerated growth with higher profit margins, proving ROI is “real,” but stock drops are due to a ‘curse of high expectations.’
“We are on the edge”: The next two years like a time warp
Dalio reiterated his concerns about the five major forces driving the global macro cycle: debt cycle, internal order, geopolitics, natural disasters, and technological change. He clearly pointed out that as macro fundamentals and geopolitics worsen, multiple risks are converging.
On the international order, Dalio’s judgment is very direct: “We have already changed the world order; it’s reverted to something like pre-1945—a world where power makes the rules.” He bluntly said that the multilateral system represented by the UN, World Bank, WTO, and WHO “is finished.”
“We are now at the edge.” Dalio warned, “The especially high-risk period is between the next two elections, that is, from after the 2026 midterms to the 2028 presidential election. It’s a very dangerous period.”
When talking about the U.S. debt problem, Dalio provided a powerful set of numbers to explain the severe supply-demand imbalance:
“The U.S. government basically spends $7 trillion and takes in about $5 trillion, a 40% overspend. It’s carrying a lot of debt, and demand for that debt is dropping.”
He further pointed out that as the midterm elections approach, it’s likely Republicans will lose the House, leading to large-scale political conflict, “including impeachments, investigations, etc.—conflicts will be substantive.” The monetary situation will also be “more threatening.”
Dalio believes that, with AI and other technology transforming so quickly, on top of debt and global tensions, “The next two or three years will be like going through a time warp, entering a much higher-risk period.”
Coping with the synthetic storm: “Timing won’t work,” cash is the worst investment
In such a complex macro environment, what should investors do? Dalio offers clear investment philosophy—give up timing, embrace all-weather diversification.
“For most individuals, the most important thing is not to try to time the market. They won’t be very successful; whenever something like war breaks out, they get excited.” Dalio emphasized.
His core advice is to build an “All Weather Portfolio”:
Gold: He suggests allocating 5%-15% to gold. “Gold is a currency—not just a long-term one, but also today, it’s the world’s second-largest reserve currency held by central banks (first is USD, second gold, third euro, fourth yen). Gold tends to do well in debt crises and geopolitical strife, and is an effective diversification tool.Beware of cash: “Cash, thought safest by most people, is in most periods the most certain bad investment—because cash returns are low, especially so in stagflation. Right now, it’s a stagflation-like environment.”Diversify, including outside the US. He admits that’s hard for many because so much is concentrated in tech and AI; “People feel like they’ll miss out on those gains.”
Also, regarding the current extreme concentration in AI tech stocks, Dalio warns that throughout history, eras of revolutionary technology often come with bubbles: “People think ‘I have to bet on this tech,’ and blindly buy in regardless of price. So, building a balanced all-weather portfolio is the most important thing people can do.”
Tech stocks’ “curse of high expectations”: AI investment return (ROI) is proven
As Dalio highlights macro risks, the giant US tech stocks (Microsoft, Amazon, Google, Meta) just reported earnings. Though most beat estimates, after-hours shares mostly fell (except Google).
D.A. Davidson’s Gil Luria summed it up as: “This is the curse of high expectations.”
Yet, beneath the headlines, Wall Street’s core concern—can AI infrastructure capex turn into revenue?—has actually been answered. Luria listed the impressive numbers:
“Microsoft’s $100 billion business is growing 40%, Amazon’s $140 billion business is growing 27%, Google’s $80 billion is growing 63%.”
Luria stressed a key incremental point:
“Most important: they’re hitting these growth rates with higher margins. This means the concern that ‘massive investment and depreciation would hurt AI business margins’ didn’t happen. They’re accelerating growth at unchanged margins, showing real ROI on AI spend.”
About the differences, Luria notes Google is the “star”—cloud revenue soared, and it’s starting to sell TPU chips. By contrast, Meta was punished for “ramping up capital spending without corresponding revenue acceleration.”
On Microsoft capex coming in below expectations, Luria argues this isn’t a strategic pullback but a matter of “physical bottlenecks” in data center construction (power shortages, local opposition, etc.), with demand just pushed into future quarters.
The invisible giant OpenAI: Unlisted but a market “systemic risk”
Beyond Big Tech earnings, the market is brewing another massive variable. At the end of the show, they noted that a company with huge systematic impact on the US stock market isn’t even listed yet—OpenAI.
A recent Wall Street Journal report about “OpenAI missing its 2025 revenue target” caused major market shock. Just because of this single article, Nvidia dropped 4%, Oracle 6%, CoreWeave 7%, SoftBank 12%—wiping nearly $400 billion in market value.
“That’s worrisome, but leads to an even bigger question: what happens when OpenAI actually goes public?” The host bluntly said OpenAI’s IPO will be a “full check-up” for the entire AI sector. “If it passes, stocks will surge; if not, today’s market structure may start to unravel.”
Complete interview transcript (AI-assisted translation) below:
Host:
Today’s number is 1.5. That’s last year’s nationwide weight in tons of beans delivered by Grubhub—bean sales up 135% over the prior year. Also, investors are pouring into what may be Wall Street’s hottest new sector. Welcome to “Property Markets,” I’m Ed Elson, and today is April 30.
Host:
First, a look at yesterday’s market. The S&P 500 and Nasdaq were roughly flat; the Dow fell. Because the Fed kept rates unchanged, traders gave up expectations of rate cuts this year, pushing the 10-year Treasury yield to a one-month high. Brent oil price hit a new post-2022 high after ex-President Trump ordered aides to prepare for a long-term blockade. With earnings season ongoing, big tech stocks posted mixed results. More on that later. What else is happening?
Host:
Earlier this year, legendary investor Dalio said the global order has fallen apart. Since his warning, US national debt has topped $39 trillion, an all-time high. We’re also at war with Iran, already costing at least $25 billion and spiking oil prices. New forecasts suggest tariffs will add another $1 trillion to the deficit over the next decade. The deficit keeps widening, inflation seems to be rising, and—meanwhile—the Fed appears paralyzed at this critical turning point. So, for in-depth analysis, we again invited the big name—Dalio, global macro investor and Bridgewater founder, and New York Times bestselling author.
Host:
Ray Dalio, thank you for being here again. Let’s start with your core investment theme—the “big cycle” and the five main forces you’ve long warned are driving it. Can you revisit: what is the big cycle? What are those five driving forces?
Dalio:
Thanks for asking. I think it’s very important to step back from daily noise and view these big cycles and orders, so I appreciate your question.
The orders we discuss consist of five main forces:First, monetary order;Second, debt cycle;Third, domestic political and social order;Fourth, international geopolitical order;Fifth, natural forces—through history, drought, floods, and plagues have often been deadlier than war; can’t ignore that;And the fifth, technology.
These five forces operate together, cycling in rhythm.
Dalio:
Starting with the debt cycle—it’s worth explaining in detail. Understanding this pattern helped me anticipate events like the 2008 financial crisis, the euro debt crisis, and succeed at the macro level.
It works like this: The credit system is a circulatory system that delivers nutrients—i.e., purchasing power—to the economy. If borrowed money increases productivity and thus creates income, it generates debt-repayment ability. Repay on time, earn more, and the system is healthy.
However, once debt and debt-servicing keep rising compared to income, things change. Debt service is like plaque in the system—squeezing out normal consumption. Subtract debt payments from income and less is left for spending. So consumption is squeezed.
Meanwhile, there’s also supply and demand. We’ve built up lots of debt—one party’s debt is another’s asset. Those holding assets expect return, so you must keep selling more assets. When large sales are needed, you get supply/demand imbalances. When both these factors pile up, it’s like plaque blocking an artery—a crisis results.
Dalio:
Third is the world order—how nations relate. There are always major conflicts and wars in history, and those often produce new orders. For example, in 1945 the US established a new monetary and world order—multilateral, borrowing from US-representative democracy, creating the UN, plus many multilateral bodies—imagine it: the International Court, World Bank, WTO, WHO—all from that era.
Of course, it wasn’t naive; rules without enforcement don’t work, and supremacy won’t accept just voting. That covers the third force.
Now, we’ve shifted global order to something like pre-1945—a “might is right” world order.
The fourth force, I’ve mentioned—natural forces.
Dalio:
And fifth is technology, which has deep influence. Technology massively boosts productivity, can generate revenue, and is useful in war and others like AI, etc.
Dalio:
That’s the big cycle’s structure. Looking at now, all these forces are operating together. We shouldn’t look at just one in isolation. For example, if we focus just on warfare with Iran, we miss the bigger picture—it’s important but just one part of a bigger confrontation.
That is, different groups have formed globally, with deep conflict and gamesmanship. The impact is enormous.
Host:
That’s helpful, since with each force there are obvious examples. On the first, as I said, US debt is above $39 trillion—a record—and this year’s deficit, at least in the first half, is already $1.3 trillion. So on the debt side, our trajectory is clear.
Domestically, people clearly see intensifying polarization—left vs right or rich vs poor—recently even jarring attacks on corporate executives, showing, I think, a rift in US social mood.
Internationally, the US-Iran conflict came after Davos, where most leaders said what you’ve predicted for years: the world order is ending, the era of globalization is closing. Even globalization’s supporters now say it’s ending.
So my feeling is: the big cycle is in motion; what you’ve talked about is happening. My question is: what stage are we in? At what point in the big cycle? What do the real-world events mean? And what does it mean for investors?
Dalio:
We’re at a tipping point. I think it’s an especially dangerous period—specifically, the next period between the two coming elections—the 2026 midterms to the 2028 presidential race—a very risky time.
From a monetary order risk view, we have debt-repayment issues: Will there be major changes? We’ll dig into it—who’s making money, who’s not, how wealth is distributed.
For instance, China has accumulated huge dollar reserves. How does that get handled? What does it mean for our international balance?
But back to your point: In the midterms, Republicans are likely to lose the House, which will mean intense political conflict—impeachments, investigations, etc. I think monetary conditions will get worse.
In other words, the supply-demand story is: US federal spending is about $7T, revenues $5T, so outlays exceed income by 40%. The debt is huge, and demand for US debt is shrinking. Demand is not just about supply-demand; today’s world is special—even in war, those holding USD debt fear they could face sanctions.
Imagine you held these assets, and the world’s two biggest economies might go to war—what would you think? So these transformations are happening. That’s one piece. Meanwhile, there’s global conflict, and technology is advancing at breakneck speed.
So in the next two to three years, it will be like a time tunnel—a much riskier period, and a time of big, hard-to-handle change. The key is how you respond, and owning a well-diversified portfolio.
In sum—long answer—I think we’re at the tipping point of these problems, and in two years, risk convergence will worsen.
Host:
So what does this imply for portfolio management? If US debt demand falls while issuance rises, plus global conflict, those are huge forces. For an investor, what does this mean? Are there any investment lessons for portfolio protection?
Dalio:
I think the most important thing is not to try and time the market. Most people aren’t good at it—they get excited when war or other shocks happen and make rash moves.
So, what matters most is holding a well-diversified, properly structured portfolio—pay attention to the relations among different asset classes.
For instance, how much gold is in your portfolio? Not too much, not too little—gold is useful for diversification, because in debt or geopolitical crises, gold tends to do well.
Don’t try to time the gold market; recognize it’s essentially a currency. It’s not just a long-term currency; today, it’s the second-largest reserve currency after the dollar.
It’s best to hold about 5-15% gold—it diversifies against other assets.
I’d also be wary about debt. You should understand that cash—a lot of people think it’s safest—most of the time is a certain money-loser. Cash yields are low, especially in stagflation. Right now, it’s a stagflation-like world, or at least an uncertain one with big challenges.
So the crucial thing is to diversify—even including assets outside the US.
That can feel hard, as much money is concentrated in areas like tech and AI. Some worry, “If I diversify, I’ll miss out.”
Nonetheless, diversification is key. Many make the mistake: “If the tech is revolutionary, I have to bet on it.” Throughout history, many new techs were revolutionary. But those times also have bubbles—people bet, regardless of price, on those stocks.
So, building a balanced all-weather portfolio—I think it’s the most important thing people can do.
Host:
There’s a lot more, but we’re out of time. Ray Dalio, Bridgewater founder and NYT bestselling author—Ray, thanks for coming on the show “Property Markets.” We always like having you here.
Dalio:
My pleasure.
Host:
Yesterday, many of the world’s most valuable companies posted strong earnings, but investors weren’t impressed.
Microsoft beat estimates for revenue and profit, with revenue up 18% year-on-year, but the stock fell 2% after hours.
Amazon also beat estimates, with cloud results strong, but its shares fell about 1% after hours.
Meta reported great numbers, revenue up 33% year-on-year, but capex beat, and user growth disappointed—shares fell nearly 7% after hours.
Google was the exception—beat on both top and bottom line, cloud sales broke $20B, stock jumped over 6% after hours.
So there’s a lot to dig in here. We now bring in DA Davidson’s Head of Technology Research, Gil Luria. Gil, great to see you again—so much to discuss.
What stunned me most was the numbers, especially the growth rates—really breathtaking. Google Cloud revenue up 63%, Microsoft Azure up 40%—crazy numbers. But from after-hours moves, investors don’t seem so excited. How do you view these reports and market reactions?
Gil Luria:
Oh, it’s the “curse of high expectations.”
Microsoft is growing a $100B business at 40%; Amazon is growing a $140B business at 27%; Google’s $80B business is growing 63%.
These growth rates are amazing. Importantly, they’re doing it with higher margins than before.
That disproves the previous fear: “AI isn’t a good business because capex and depreciation hurt margins”—not true. They’re managing growth well, growing faster and improving margins.
This is crucial for ROI—if they can accelerate growth at sustained margins, AI investment is worthwhile.
But as you noted, Google is today’s star. Not just in cloud—ad revenue is still accelerating, search is growing 19%. That’s big, and still speeding up.
They’re closing in on Meta for ad growth. Meta used to outpace Google two-to-one in ads; now, they’re converging.
Google is also selling TPU chips. A year ago, we speculated they might; now they are. The chips are so good external customers want them.
So Google is the star; others look less bright by comparison.
Host:
It’s almost like you must bet on these companies. Think: we used to worry about massive AI infra build, capex, ROI. Now, it’s here: ROI is real, business is surging, you have no choice—you have to own these names.
Which makes the after-hour drops even more puzzling—maybe that changes during regular trading or later this week. But my question: at this stage, how could you not own big tech?
Gil Luria:
Yes, exactly right.
Let’s first group Microsoft, Amazon, and Google. They’re all getting excellent returns on capex and may ramp it up—Google said so. So, that’s one group.
Meta is different, It doesn’t sell any data center capacity externally—all for itself. Investors dislike Meta’s report partly because Meta is still ramping capex, but no revenue acceleration. So, capex rising but revenue isn’t, while Google, Microsoft, and Amazon show clear payoffs.
Back to your macro point—yes, big tech is capturing almost all value right now.
First, not reporting today but the chip stocks—Nvidia, Broadcom, AMD, Intel, Micron—are capturing a lot of value.
Then the big providers of AI compute—Microsoft, Amazon, Google—provide all the compute, not just for OpenAI and Anthropic. Anyone building AI uses one of those three, in some way.
So, those returns are very real—that’s clear now.
Today, the market’s expectations for Microsoft and Amazon were sky-high—they didn’t quite meet them. Meta’s report is weaker and with higher capex.
Host:
When the Iran conflict broke out, tech stocks dropped—really, the whole market dropped, but tech bore much of the pain. Then, they rebounded—investors seemed to realize the conflict might not matter to them.
So now we see actual effects from that time. Turns out, no effect. Does war with Iran, or the wider global impact, have anything to do with big tech? Or, are the big techs completely isolated, totally independent?
Gil Luria:
They’re quite insulated.
Oil isn’t an input for them. Their only exposure is second-order effects—if the global economy slows, Meta and Google’s ads may slow, Amazon’s retail may slow, so might parts of Microsoft. But there’s no direct impact from war.
The main growth driver right now is booming demand for AI compute. That has almost nothing to do with Mideast conflict.
So, basically they’re insulated—unless the economy tanks, which doesn’t look likely.
Host:
From a valuation standpoint, Dave, do any companies stand out on valuation? Do these earnings help inform valuation?
Gil Luria:
Yes, Microsoft really stands out. Google, when it trades tomorrow, and Amazon, have forward P/Es in the high 20s or 30s. Microsoft’s is still low 20s. Even though their growth is similar—high teens—Microsoft isn’t getting credit. Part is its software segment; people are very bearish on software recently. Plus, capex concerns. So, Google and Amazon have higher multiples; Microsoft’s is lower—I like Microsoft for that. Meta’s multiple is also low, but capex discipline is lacking and investors dislike that, especially now.
Host:
What do you make of Microsoft’s spending coming in low? Are they pulling back? Or, unlike Meta, pulling back on AI?
Gil Luria:
This is more data center buildout bottlenecks. Demand for resources is extremely high. Last week Intel said they had to “pull chips out of the trash pile” to meet demand. DRAM prices have quadrupled in a year. There are bottlenecks—transformers, power, advanced packaging. Many obstacles: some states say “not in my backyard,” refusing data centers. All these firms face this to a degree. For Microsoft, it just slows things down, but given demand’s strength, it’s just pushing projects to later quarters, not cutting spend for strategic reasons.
Host:
Big week. Gill Luria, DA Davidson Tech Analyst—Gil, thank you. We’ll be back. If you like the show, subscribe at the link to Property Markets’ YouTube.
Host:
We’re back, this is Property Markets. This week’s big focus is tech earnings. The four we just discussed represent almost one-fifth of the S&P 500’s market cap—they’re a huge focus. But there is another company now with real market-moving power, even though it’s not even public—OpenAI.
Yes—this private AI startup is now structurally one of the biggest market movers. Even slight news about it can wipe out hundreds of billions.
For example, yesterday, the WSJ reported OpenAI missed its 2025 revenue goals. Result: sharp drops—not OpenAI shares, since it’s not public, but for others: Nvidia down 4%, Oracle down 6%, CoreWeave down 7%, SoftBank down 12%. In total, about $400 billion in value lost—all because of one story about a still-private company.
That’s a bit worrying, but raises a bigger question: What happens when OpenAI really IPOs? When it’s required to disclose quarterly results, how will investors react? Or when they have to reveal how much they’ll spend on compute over five years? Will investors be exhilarated or not? That’s a trillion-dollar question—not just about OpenAI’s own value, but for Nvidia, Oracle, Microsoft, and many others as well.
I don’t know the answer, but so far, whenever we peek under OpenAI’s hood—like this week—the market’s reaction is pretty negative. Nonetheless, despite the CFO’s concerns, the plan to go public hasn’t changed. When it does, investors won’t just get a peek—they’ll scrutinize every aspect of the business. So, it’s a key test for OpenAI. More importantly, it’s a key test for the entire market. If OpenAI passes, stocks will surge. If it fails, as this week already showed, the market we know today could start to unravel.
Thanks for watching Profg Markets from Profg Media.
Risk warning and disclaimerMarkets have risks; investments should be made cautiously. This article does not constitute individual investment advice and does not take into account the special investment objectives, financial circumstances, or needs of any individual user. Users should consider whether any opinions, views, or conclusions in this article are appropriate for their circumstances. You are responsible for your own investments. ```