Billionaire investor Ray Dalio believes that the U.S. stock market is not in a speculative bubble. The founder of Bridgewater, one of the world’s largest hedge funds, analyzed the market based on his bubble criteria, which includes valuation, sentiment, new buyers and unsustainable conditions. “When I look at the U.S. stock market using these criteria, it — and even some of the parts that have rallied the most and gotten media attention — doesn’t look very bubbly,” he said in a new LinkedIn post published Thursday. .SPX 1Y mountain S & P 500 The S & P 500 is wrapping up its fourth winning month after hitting a new all-time high on the back of continued enthusiasm surrounding artificial intelligence. The seemingly relentless rally, led by the so-called ” Magnificent 7 ” stocks, have led some to worry about the sustainability of the latest bull move. Dalio said the valuation of the Mag 7 names are slightly expensive but not excessively so. “The Mag-7 is measured to be a bit frothy but not in a full-on bubble,” he wrote. “That said, one could still imagine a significant correction in these names if generative AI does not live up to the priced-in impact.” The widely-followed investor compared AI darling Nvidia with Cisco during the dotcom bubble in the late 1990s. While their price trajectory look similar, the path of cash flows has been very different. Nvidia’s two-year forward price-to-earnings ratio is around 37 today, while Cisco’s multiple hit 100 at the height of the internet bubble, Dalio noted. “The market was pricing in far more speculative/long-term growth than we see today,” he said.