Dario: AI, U.S. debt, and geopolitical synthetic storms; high risks ahead in the next two years

Bridgewater Fund founder Ray Dalio issues the latest warning: the next two years will be a “particularly dangerous period,” as debt, geopolitical, and technological triple storms converge, and most investors’ approach—timing the market—is doomed to fail.

On April 30th, local time, on the well-known financial podcast “Property Markets,” Bridgewater founder and legendary macro investor Ray Dalio and D.A. Davidson’s tech research chief Gil Luria shared in-depth views on the current macro cycle and tech giants’ earnings reports.

Dalio’s core conclusion is straightforward: “We are on the edge. The next two to three years will be like going through a time wormhole.” He explicitly states that the period from the mid-2026 elections to the 2028 presidential election will be a “particularly dangerous period.”

Luria says that tech giants’ AI investments have achieved accelerated growth at higher profit margins, proving ROI is real, but stock prices are falling due to a “high expectations curse.”

“We are on the edge”: the next two years are like crossing time

Dalio reaffirmed his concern about the “five major forces” driving the global long cycle (debt cycle, internal order, geopolitics, natural disasters, technological change) in the interview. He clearly points out that as macro fundamentals and geopolitics worsen, various risks are converging.

On the international order, Dalio’s judgment is very blunt: “We have changed the world order, returning to a pre-1945 order—a world order where power equals rule.” He states plainly that multilateral systems represented by the UN, World Bank, WTO, WHO “are over.”

“We are now on the edge.” Dalio warns, “The especially high-risk period is between the next two elections, from the 2026 midterms to the 2028 presidential election. This is a very dangerous time.”

Regarding U.S. debt issues, Dalio provides a set of impactful data illustrating the severity of debt supply-demand imbalance:

“The U.S. government basically spends $7 trillion, with revenues around $5 trillion, a deficit of 40%. It carries a large amount of debt, and demand for that debt is declining.”

He further notes that as the midterm elections approach, Republicans are likely to lose the House, leading to large-scale political conflicts, “including impeachment, investigations, etc., and the conflicts will be substantive.” The monetary situation will also become “more threatening.”

Dalio believes that, amid rapid technological change driven by AI and others, combined with debt and international conflicts, “the next two to three years will be like going through a time warp, and we will face a period of higher risk.”

Dealing with the synthetic storm: “timing won’t succeed,” cash is the worst investment

Faced with such a complex macro environment, how should investors respond? Dalio offers a clear investment philosophy—abandon market timing, embrace all-weather diversification.

“For most individuals, the most important thing is not to try to market time. They won’t be very successful at it, and when war or similar events happen, they tend to get overly excited.” Dalio emphasizes.

His core advice is to build an “All Weather Portfolio”:

• Gold:

  He recommends allocating 5%-15%. “Gold is a currency, not just a long-term currency; today, it is also the second-largest reserve currency held by central banks—after the dollar, then gold, then euro, then yen.” Gold often performs well during debt crises and geopolitical conflicts, making it an effective diversification tool.

• Beware of cash:

  “Cash, considered the safest investment, is actually the most certain to be a poor investment most of the time—because returns are low, especially in stagflation.” He clearly states that we are currently in a stagflation-like environment.

• Diversify, including assets outside the U.S.:

  He admits this is difficult for many, as funds are heavily concentrated in tech and AI sectors, “people feel they will miss out on the gains there.”

Additionally, regarding the current market’s extreme concentration in AI tech stocks, Dalio warns that historically, revolutionary technologies often come with bubbles, “people want to bet on this technology, so they blindly buy these stocks without regard to price.” Therefore, building a balanced “all-weather investment portfolio” is the most important thing people can do.

The “high expectations curse” for tech stocks: ROI of AI investments has been validated

While Dalio highlights macro risks, at the micro level, U.S. tech giants (Microsoft, Amazon, Google, Meta) just reported their latest quarterly earnings. Despite revenue beating expectations, stock prices generally fell after hours (except Google).

D.A. Davidson tech research chief Gil Luria summarizes this phenomenon as: “The curse of high expectations.”

However, behind the earnings figures, the key question on Wall Street—whether AI capital expenditure can translate into revenue—has been positively confirmed. Luria cites impressive data:

“Microsoft’s hundred-billion-dollar business is growing at 40%, Amazon’s $140 billion business grew 27%, and Google’s $80 billion business grew 63%.”

Luria emphasizes a crucial incremental point:

“An important point is that these companies are achieving these growth rates at higher profit margins than before. This means that the concern we had earlier—‘AI business margins will decline due to heavy investment and depreciation’—has not materialized. They are accelerating growth at the same profit margins, which indicates they are getting real ROI from AI.”

Regarding differences among these companies, Luria notes that Google is the undisputed “star,” not only because its cloud business surged but also because it has started selling TPU chips. Compared to Meta, which was punished for “increasing capital expenditure without corresponding revenue acceleration.”

As for Microsoft’s capital expenditure being below expectations, Luria believes this is not strategic contraction but rather due to physical bottlenecks in data center construction (such as power shortages, local opposition), with demand actually deferred to future quarters.

The invisible giant OpenAI: a systemic risk before going public

Beyond corporate earnings, the market is brewing another huge variable. The show concludes that the company with the most systemic influence on U.S. stocks—yet not even listed—is OpenAI.

A recent Wall Street Journal report on “OpenAI failing to meet 2025 revenue targets” caused significant market turbulence. Data shows that just because of this report, Nvidia fell 4%, Oracle 6%, CoreWeave 7%, SoftBank 12%, wiping nearly $400 billion in market value.

“That’s somewhat worrying, but it raises an even more concerning question: how will the market react when OpenAI actually goes public?” the host states. An IPO for OpenAI would be a “comprehensive health check” for the entire AI sector, “if it passes the test, the market will inevitably soar; if it fails, the current stock market structure could start to unravel.”

Full transcript of the interview (AI-assisted translation):

Host:

Today’s number is: 1.5. This is the weight of beans delivered nationwide by Grubhub last year—1.5 tons, a 135% increase over the previous year. Also, investors are rushing into what might be the hottest new track on Wall Street. Welcome to “Property Markets,” I’m Ed Elson, today is April 30.

Host:

Let’s first review yesterday’s market overview. The S&P 500 and Nasdaq were basically flat, while the Dow Jones declined. With the Fed holding rates steady, traders abandoned expectations of rate cuts this year, pushing the 10-year U.S. Treasury yield to a one-month high. Brent crude hit its highest since 2022 after Trump aides prepared to implement long-term sanctions. As earnings season kicks off, big tech stocks show mixed results. We’ll detail that later. Anything else?

Host:

Earlier this year, legendary investor Dalio declared that the global order has collapsed. Since his warning, U.S. debt has surpassed $39 trillion, hitting a record high. We also have a war with Iran, costing at least $390k, and causing oil prices to surge. Additionally, new forecasts suggest tariffs could add $1 trillion to the fiscal deficit over the next decade. Overall, deficits are expanding, inflation seems to be rising, and the Fed is forced to hold steady during this critical transition. So, we decided to delve deeper into these dynamics and invited this prominent figure—Dalio, a global macro investor, founder of Bridgewater, and a New York Times bestselling author.

Host:

Dalio, thank you again for joining us. I think we should start with your core investment theme—the “big cycle”—and the five key forces you’ve long warned about that drive these cycles. Could you clarify: what is the big cycle? And what are these five forces that propel market movements?

Dalio:

Thanks for the question. I believe that stepping back from daily trivialities to examine these cycles and orders is very important, so I appreciate you raising this.

The five core forces that shape our discussed order are:

• First, monetary order;
• Second, debt cycle;
• Third, domestic political and social order;
• Fourth, international geopolitical order;
• Fifth, natural forces—throughout history, droughts, floods, and plagues have caused more destruction and taken more lives than wars, and this factor cannot be ignored;
• And finally, technology.

These five forces operate together and cycle periodically.

Dalio:

Starting with the first—debt cycle. I will describe it in detail, hoping everyone will understand the principles. It’s this understanding that helped me successfully predict major events like the 2008 financial crisis and the European debt crisis, earning good results.

Its mechanism is like this: the credit system is a cyclical system that delivers nutrients—i.e., purchasing power—to various parts of the economy. If borrowed money is used to enhance productivity and generate income, then debt repayment capacity is created. If you repay on time and profits grow, the system remains healthy.

But once debt and debt repayment expenses relative to income keep rising, the situation changes. Debt repayment acts like a “patch” in the cycle—it squeezes normal consumption. In other words, after income minus debt payments, the remaining disposable income shrinks, compressing consumption.

Meanwhile, supply and demand issues also emerge. Currently, we have accumulated large amounts of debt—one person’s debt is another’s asset. Asset holders expect good returns, but to get them, they must keep selling more assets. When large-scale selling occurs, supply-demand imbalance arises. When both happen simultaneously, like patches piling up in the system, a crisis ensues.

Dalio:

The third point is world order—how countries interact. Historically, major conflicts and wars have occurred, and post-war periods often see new orders. For example, in 1945, the U.S. established a new monetary and world order—a multilateral order inspired partly by American democratic ideals, leading to the UN and various multilateral institutions—you can imagine, including the International Court, World Bank, WTO, WHO, all products of that era.

Of course, this system isn’t perfect, because if it’s just voting without enforcement, it won’t work, and leading countries won’t accept it. That’s what the third point is about.

Today, we’ve shifted the world order back to a pre-1945 style—an order where “power equals rule”.

The fourth point I mentioned is natural forces.

Dalio:

And the fifth is technology, which also has a profound impact. Technology can greatly boost productivity, and if this productivity creates income, it can be very helpful. Similarly, AI and other tech can be used for war or other purposes.

Dalio:

This is the framework of the entire big cycle. When we look at the present, we see these forces acting simultaneously. We should not view any one in isolation. For example, if we focus only on the conflict with Iran, we might overlook a larger context—that this conflict is part of a broader confrontation.

In other words, the world has formed different camps, with deep conflicts and power struggles. The influence of these dynamics is extremely profound.

Host:

That’s very helpful, because for each force, clear examples come to mind. For the first—debt—my first thought is that, as I said, U.S. national debt has exceeded $39 trillion, a record high. Also, our fiscal deficit this year, at least in the first half, has already reached $1.3 trillion. So from a debt perspective, the trend is very clear.

Domestically, most people see the growing divide between left and right, rich and poor. Recently, some disturbing attacks on corporate executives have occurred, which at least partly indicate that social sentiment in the U.S. is beginning to fracture.

On the international front, conflicts with Iran are ongoing, especially after the Davos forum—where most leaders acknowledged the words you’ve long predicted: the world order as we knew it is breaking down, and globalization is ending. Even globalization supporters admit that the era is ending.

So my understanding is: the big cycle is unfolding, and those things you’ve been warning about are happening in real time. The question then becomes: what stage are we in within this big cycle? What specific phase are we in? What do these current events tell us? And what does it mean for investors?

Dalio:

We are at a critical point. I believe this is a particularly dangerous period, specifically between the next two elections—between the 2026 midterms and the 2028 presidential election—when risks are higher, and it’s a very dangerous phase.

From the perspective of monetary order risk, are we facing major changes in debt repayment? We’ll explore this—who is profiting, who isn’t, how wealth is distributed.

A very interesting and important example: China has accumulated a large amount of dollars. How are these dollars being managed? What does this mean for our international balance of payments?

But to answer your question directly: in the midterm elections, the Republicans are likely to lose the House, leading to severe political conflicts, including impeachment and investigations. The conflicts will be intense. I think the monetary situation will become even more worrisome.

In other words, supply and demand issues are like this: the U.S. federal government spends about $7 trillion, with revenues around $5 trillion, so the deficit is about 40%. The government’s debt is huge, and demand for this debt is declining. Demand decline isn’t just about normal supply and demand; it’s also because we’re in a special global environment—even during wars, holders of dollar-denominated debt worry about sanctions.

Imagine holding these assets when the two largest economies might clash. How would you think? These shifts are happening. That’s one factor. International conflicts are also at play, and technology is changing at an astonishing pace.

So I believe that in the next two to three years, it will be like going through a time tunnel, experiencing a period of higher risk and massive change, especially difficult to manage. The key is how you respond and how diversified your portfolio is.

To answer your question, although I’m rambling, I think we are at a critical point, and in about two years, we will face a convergence of more risks.

Host:

Yes, my next question is: what does this mean for portfolio management? Long-term, if we see demand for U.S. debt declining while issuance increases, and global conflicts escalate, these are huge forces that are hard to fully grasp and digest. What does this mean for an investor? Are there investment principles or decisions that can protect your portfolio?

Dalio:

I think the most important thing for most people is not to try to time the market. Many won’t succeed at it. They might get excited when war or other events happen and make rash decisions.

Yes, the most important thing is to have a well-structured, diversified portfolio, paying attention to the relationships among different assets.

For example, as a general suggestion, I ask: how much gold do you have in your portfolio? Not too much, not too little, but gold is an effective diversification tool that can hedge against other assets. Because when things go badly—debt issues or geopolitical conflicts—gold often performs well.

Don’t try to time gold’s market; instead, recognize that it’s fundamentally a currency. It’s not only a long-term currency but also today the second-largest reserve currency held by central banks—after the dollar, then gold, then euro, then yen.

I recommend allocating about 5% to 15% of your portfolio to gold, to help diversify and hedge.

I also advise being cautious about cash. Many think cash is the safest investment, but in reality, it’s often the most certain to lose value because returns are low, especially in stagflation. We are currently in a stagflation-like environment, or at least a highly uncertain one, which presents many challenges.

So, the most important thing is to learn how to diversify effectively. This includes investing outside the U.S., not just domestically.

For many, this may seem difficult because a lot of capital is concentrated in certain sectors, like tech and AI. Some might think, “I’ll miss out on those gains if I diversify.”

But diversification remains crucial. I believe many make the mistake of betting on a revolutionary technology just because it’s revolutionary. Historically, many new technologies are indeed revolutionary, no doubt. But such periods often come with bubbles—people want to bet on a tech, so they buy stocks blindly, regardless of price.

Therefore, building a balanced “all-weather portfolio” is the most important thing people can do.

Host:

There’s much more to explore, but we’ll save that for next time. Ray Dalio, founder of Bridgewater and bestselling author, thank you again for joining “Property Markets.” We always appreciate your insights.

Dalio:

It’s my pleasure.

Host:

Yesterday, many of the world’s most valuable companies reported strong earnings, but investors didn’t seem too convinced.

Microsoft beat expectations on revenue and profit, with revenue up 18% YoY, but its stock fell 2% after hours.

Amazon also exceeded expectations, with cloud growth stronger than expected, but its stock fell about 1%.

Meta delivered a stellar quarter, with revenue up 33% YoY, but due to higher-than-expected capital expenditure and disappointing user growth, its stock dropped nearly 7% after hours.

Google was an exception—beating revenue estimates, with cloud sales surpassing $20 billion, and its stock rose over 6% after hours.

There’s a lot worth analyzing here. We’re now connecting with Gil Luria, head of tech research at D.A. Davidson. Gil, glad to see you again. We have a lot to discuss.

What struck me most are these numbers, especially the growth figures—they’re astonishing. Google’s cloud revenue grew 63%, Azure at Microsoft grew 40%, these are crazy numbers. But from the after-hours trading, investors don’t seem that excited. How do you view these earnings and the market’s current reaction?

Gil Luria:

Oh, that’s the “curse of high expectations.”

Microsoft is growing a $70k business at 40%; Amazon’s $50k business grew 27%; Google’s $390k business grew 63%.

These growth rates are truly incredible. And importantly—they’re achieving these at higher profit margins than before. This dispels our earlier worries: “AI business margins will decline due to heavy investments and depreciation”—that hasn’t happened. They’re accelerating growth while maintaining or even improving margins, meaning they’re getting real ROI from AI.

This is crucial for ROI—if these companies can grow faster at the same profit margins, it indicates they’re realizing genuine returns on their AI investments.

Regarding differences among these companies, Luria notes that Google is the undisputed “star,” not only because its cloud business surged but also because it has started selling TPU chips. Compared to Meta, which was punished for “raising capital expenditure without corresponding revenue acceleration.”

As for Microsoft’s capital expenditure being below expectations, Luria believes it’s not strategic contraction but rather due to physical bottlenecks in data center construction (like power shortages, local opposition). Demand is actually deferred, not canceled.

The hidden giant OpenAI: a systemic risk before IPO

Beyond earnings, the market is brewing another huge variable. The show concludes that the company with the most systemic influence on U.S. stocks—yet not even listed—is OpenAI.

A recent WSJ report on “OpenAI failing to meet 2025 revenue targets” caused significant market turbulence. Data shows that just because of this report, Nvidia fell 4%, Oracle 6%, CoreWeave 7%, SoftBank 12%, wiping nearly $10k in market value.

“That’s somewhat worrying, but it raises an even more concerning question: how will the market react when OpenAI actually goes public?” the host states. An IPO for OpenAI would be a “comprehensive health check” for the entire AI sector, “if it passes, the market will soar; if it fails, the current market structure could start to break down.”

Full interview transcript (AI-assisted translation):

Host:

Today’s figure: 1.5. That’s the weight of beans delivered nationwide by Grubhub last year—1.5 tons, a 135% increase over the previous year. Also, investors are rushing into what might be the hottest new sector on Wall Street. Welcome to “Property Markets,” I’m Ed Elson, today is April 30.

Host:

Let’s first review yesterday’s market overview. The S&P 500 and Nasdaq were basically flat, while the Dow declined. With the Fed holding rates steady, traders abandoned expectations of rate cuts this year, pushing the 10-year U.S. Treasury yield to a one-month high. Brent crude hit its highest since 2022 after Trump aides prepared to implement long-term sanctions. As earnings season kicks off, big tech stocks show mixed results. We’ll detail that later. Anything else?

Host:

Earlier this year, legendary investor Dalio declared that the global order has collapsed. Since his warning, U.S. debt has surpassed $39 trillion, hitting a record high. We also have a war with Iran, costing at least $70k, and causing oil prices to surge. Additionally, new forecasts suggest tariffs could add $1 trillion to the fiscal deficit over the next decade. Overall, deficits are expanding, inflation seems to be rising, and the Fed is forced to hold steady during this critical transition. So, we decided to delve deeper into these dynamics and invited this prominent figure—Dalio, a global macro investor, founder of Bridgewater, and a New York Times bestselling author.

Host:

Dalio, thank you again for joining us. I think we should start with your core investment theme—the “big cycle”—and the five key forces you’ve long warned about that drive these cycles. Could you clarify: what is the big cycle? And what are these five forces that propel market movements?

Dalio:

Thanks for the question. I believe that stepping back from daily trivialities to examine these cycles and orders is very important, so I appreciate you raising this.

The five core forces that shape our discussed order are:

• First, monetary order;
• Second, debt cycle;
• Third, domestic political and social order;
• Fourth, international geopolitical order;
• Fifth, natural forces—throughout history, droughts, floods, and plagues have caused more destruction and taken more lives than wars, and this factor cannot be ignored;
• And finally, technology.

These five forces operate together and cycle periodically.

Dalio:

Starting with the first—debt cycle. I will describe it in detail, hoping everyone will understand the principles. It’s this understanding that helped me successfully predict major events like the 2008 financial crisis and the European debt crisis, earning good results.

Its mechanism is like this: the credit system is a cyclical system that delivers nutrients—i.e., purchasing power—to various parts of the economy. If borrowed money is used to enhance productivity and generate income, then debt repayment capacity is created. If you repay on time and profits grow, the system remains healthy.

But once debt and debt repayment expenses relative to income keep rising, the situation changes. Debt repayment acts like a “patch” in the cycle—it squeezes normal consumption. In other words, after income minus debt payments, the remaining disposable income shrinks, compressing consumption.

Meanwhile, supply and demand issues also emerge. Currently, we have accumulated large amounts of debt—one person’s debt is another’s asset. Asset holders expect good returns, but to get them, they must keep selling more assets. When large-scale selling occurs, supply-demand imbalance arises. When both happen simultaneously, like patches piling up in the system, a crisis ensues.

Dalio:

The third point is world order—how countries interact. Historically, major conflicts and wars have occurred, and post-war periods often see new orders. For example, in 1945, the U.S. established a new monetary and world order—a multilateral order inspired partly by American democratic ideals, leading to the UN and various multilateral institutions—you can imagine, including the International Court, World Bank, WTO, WHO, all products of that era.

Of course, this system isn’t perfect, because if it’s just voting without enforcement, it won’t work, and leading countries won’t accept it. That’s what the third point is about.

Today, we’ve shifted the world order back to a pre-1945 style—an order where “power equals rule”.

The fourth point I mentioned is natural forces.

Dalio:

And the fifth is technology, which also has a profound impact. Technology can greatly boost productivity, and if this productivity creates income, it can be very helpful. Similarly, AI and other tech can be used for war or other purposes.

Dalio:

This is the framework of the entire big cycle. When we look at the present, we see these forces acting simultaneously. We should not view any one in isolation. For example, if we focus only on the conflict with Iran, we might overlook a larger context—that this conflict is part of a broader confrontation.

In other words, the world has formed different camps, with deep conflicts and power struggles. The influence of these dynamics is extremely profound.

Host:

That’s very helpful, because for each force, clear examples come to mind. For the first—debt—my first thought is that, as I said, U.S. national debt has exceeded $39 trillion, a record high. Also, our fiscal deficit this year, at least in the first half, has already reached $1.3 trillion. So from a debt perspective, the trend is very clear.

Domestically, most people see the growing divide between left and right, rich and poor. Recently, some disturbing attacks on corporate executives have occurred, which at least partly indicate that social sentiment in the U.S. is beginning to fracture.

On the international front, conflicts with Iran are ongoing, especially after the Davos forum—where most leaders acknowledged the words you’ve long predicted: the world order as we knew it is breaking down, and globalization is ending. Even globalization supporters admit that the era is ending.

So my understanding is: the big cycle is unfolding, and those things you’ve been warning about are happening in real time. The question then becomes: what stage are we in within this big cycle? What specific phase are we in? What do these current events tell us? And what does it mean for investors?

Dalio:

We are at a critical point. I believe this is a particularly dangerous period, specifically between the next two elections—between the 2026 midterms and the 2028 presidential election—when risks are higher, and it’s a very dangerous phase.

From the perspective of monetary order risk, are we facing major changes in debt repayment? We’ll explore this—who is profiting, who isn’t, how wealth is distributed.

A very interesting and important example: China has accumulated a large amount of dollars. How are these dollars being managed? What does this mean for our international balance of payments?

But to answer your question directly: in the midterm elections, the Republicans are likely to lose the House, leading to severe political conflicts, “including impeachment, investigations, etc., and the conflicts will be substantive.” The monetary situation will also become “more threatening.”

Dalio believes that, amid rapid technological change driven by AI and others, combined with debt and international conflicts, “the next two to three years will be like going through a time warp, and we will face a period of higher risk.”

Dealing with the synthetic storm: “timing won’t succeed,” cash is the worst investment

Faced with such a complex macro environment, how should investors respond? Dalio offers a clear investment philosophy—abandon market timing, embrace all-weather diversification.

“For most individuals, the most important thing is not to try to market time. They won’t be very successful at it, and when war or similar events happen, they tend to get overly excited.” Dalio emphasizes.

His core advice is to build an “All Weather Portfolio”:

• Gold:

  He recommends allocating 5%-15%. “Gold is a currency, not just a long-term currency; today, it is also the second-largest reserve currency held by central banks—after the dollar, then gold, then euro, then yen.” Gold often performs well during debt crises and geopolitical conflicts, making it an effective diversification tool.

• Beware of cash:

  “Cash, considered the safest investment, is actually the most certain to be a poor investment most of the time—because returns are low, especially in stagflation.” He clearly states that we are currently in a stagflation-like environment.

• Diversify, including assets outside the U.S.:

  He admits this is difficult for many, as funds are heavily concentrated in tech and AI sectors, “people feel they will miss out on the gains there.”

Additionally, regarding the current market’s extreme concentration in AI tech stocks, Dalio warns that historically, revolutionary technologies often come with bubbles, “people want to bet on this technology, so they blindly buy these stocks without regard to price.” Therefore, building a balanced “all-weather investment portfolio” is the most important thing people can do.

The “high expectations curse” for tech stocks: ROI of AI investments has been validated

While Dalio highlights macro risks, at the micro level, U.S. tech giants (Microsoft, Amazon, Google, Meta) just reported their latest quarterly earnings. Despite revenue beating expectations, stock prices generally fell after hours (except Google).

D.A. Davidson tech research chief Gil Luria summarizes this phenomenon as: “The curse of high expectations.”

However, behind the earnings figures, the key question on Wall Street—whether AI capital expenditure can translate into revenue—has been positively confirmed. Luria cites impressive data:

“Microsoft’s hundred-billion-dollar business is growing at 40%, Amazon’s $140 billion business grew 27%, and Google’s $80 billion business grew 63%.”

Luria emphasizes a crucial incremental point:

“An important point is that these companies are achieving these growth rates at higher profit margins than before. This means that the concern we had earlier—‘AI business margins will decline due to heavy investment and depreciation’—has not materialized. They are accelerating growth at the same profit margins, which indicates they are getting real ROI from AI.”

Regarding differences among these companies, Luria notes that Google is the undisputed “star,” not only because its cloud business surged but also because it has started selling TPU chips. Compared to Meta, which was punished for “raising capital expenditure without corresponding revenue acceleration.”

As for Microsoft’s capital expenditure being below expectations, Luria believes it’s not strategic contraction but rather due to physical bottlenecks in data center construction (like power shortages, local opposition). Demand is actually deferred, not canceled.

The hidden giant OpenAI: a systemic risk before IPO

Beyond corporate earnings, the market is brewing another huge variable. The show concludes that the company with the most systemic influence on U.S. stocks—yet not even listed—is OpenAI.

A recent WSJ report on “OpenAI failing to meet 2025 revenue targets” caused significant market turbulence. Data shows that just because of this report, Nvidia fell 4%, Oracle 6%, CoreWeave 7%, SoftBank 12%, wiping nearly $13k in market value.

“That’s somewhat worrying, but it raises an even more concerning question: how will the market react when OpenAI actually goes public?” the host states. An IPO for OpenAI would be a “comprehensive health check” for the entire AI sector, “if it passes, the market will soar; if it fails, the current market structure could start to break down.”

Full interview transcript (AI-assisted translation):

Host:

Today’s figure: 1.5. That’s the weight of beans delivered nationwide by Grubhub last year—1.5 tons, a 135% increase over the previous year. Also, investors are rushing into what might be the hottest new sector on Wall Street. Welcome to “Property Markets,” I’m Ed Elson, today is April 30.

Host:

Let’s first review yesterday’s market overview. The S&P 500 and Nasdaq were basically flat, while the Dow declined. With the Fed holding rates steady, traders abandoned expectations of rate cuts this year, pushing the 10-year U.S. Treasury yield to a one-month high. Brent crude hit its highest since 2022 after Trump aides prepared to implement long-term sanctions. As earnings season kicks off, big tech stocks show mixed results. We’ll detail that later. Anything else?

Host:

Earlier this year, legendary investor Dalio declared that the global order has collapsed. Since his warning, U.S. debt has surpassed $39 trillion, hitting a record high. We also have a war with Iran, costing at least $25 billion, and causing oil prices to surge. Additionally, new forecasts suggest tariffs could add $1 trillion to the fiscal deficit over the next decade. Overall, deficits are expanding, inflation seems to be rising, and the Fed is forced to hold steady during this critical transition. So, we decided to delve deeper into these dynamics and invited this prominent figure—Dalio, a global macro investor, founder of Bridgewater, and a New York Times bestselling author.

Host:

Dalio, thank you again for joining us. I think we should start with your core investment theme—the “big cycle”—and the five key forces you’ve long warned about that drive these cycles. Could you clarify: what is the big cycle? And what are these five forces that propel market movements?

Dalio:

Thanks for the question. I believe that stepping back from daily trivialities to examine these cycles and orders is very important, so I appreciate you raising this.

The five core forces that shape our discussed order are:

• First, monetary order;
• Second, debt cycle;
• Third, domestic political and social order;
• Fourth, international geopolitical order;
• Fifth, natural forces—throughout history, droughts, floods, and plagues have caused more destruction and taken more lives than wars, and this factor cannot be ignored;
• And finally, technology.

These five forces operate together and cycle periodically.

Dalio:

Starting with the first—debt cycle. I will describe it in detail, hoping everyone will understand the principles. It’s this understanding that helped me successfully predict major events like the 2008 financial crisis and the European debt crisis, earning good results.

Its mechanism is like this: the credit system is a cyclical system that delivers nutrients—i.e., purchasing power—to various parts of the economy. If borrowed money is used to enhance productivity and generate income, then debt repayment capacity is created. If you repay on time and profits grow, the system remains healthy.

But once debt and debt repayment expenses relative to income keep rising, the situation changes. Debt repayment acts like a “patch” in the cycle—it squeezes normal consumption. In other words, after income minus debt payments, the remaining disposable income shrinks, compressing consumption.

Meanwhile, supply and demand issues also emerge. Currently, we have accumulated large amounts of debt—one person’s debt is another’s asset. Asset holders expect good returns, but to get them, they must keep selling more assets. When large-scale selling occurs, supply-demand imbalance arises. When both happen simultaneously, like patches piling up in the system, a crisis ensues.

Dalio:

The third point is world order—how countries interact. Historically, major conflicts and wars have occurred, and post-war periods often see new orders. For example, in 1945, the U.S. established a new monetary and world order—a multilateral order inspired partly by American democratic ideals, leading to the UN and various multilateral institutions—you can imagine, including the International Court, World Bank, WTO, WHO, all products of that era.

Of course, this system isn’t perfect, because if it’s just voting without enforcement, it won’t work, and leading countries won’t accept it. That’s what the third point is about.

Today, we’ve shifted the world order back to a pre-1945 style—an order where “power equals rule”.

The fourth point I mentioned is natural forces.

Dalio:

And the fifth is technology, which also has a profound impact. Technology can greatly boost productivity, and if this productivity creates income, it can be very helpful. Similarly, AI and other tech can be used for war or other purposes.

Dalio:

This is the framework of the entire big cycle. When we look at the present, we see these forces acting simultaneously. We should not view any one in isolation. For example, if we focus only on the conflict with Iran, we might overlook a larger context—that this conflict is part of a broader confrontation.

In other words,