Bridgewater Trims NVIDIA Stake Amid Macro Caution on Debt Risks

Bridgewater Associates, the world's largest hedge fund, significantly reduced its stake in NVIDIA Corporation in the third quarter of 2025, marking a notable shift in its portfolio strategy. According to the firm's latest 13F filing and corroborated by a report from Lookonchain, Bridgewater held 2.51 million shares of NVIDIA as of September 30, a 65.3% decline from the 7.23 million shares it held at the end of June. This reduction follows a substantial 154.37% increase in the second quarter, indicating a strategic pivot amid evolving macroeconomic conditions.

The move aligns with broader caution from Bridgewater founder Ray Dalio, who has repeatedly warned of late-stage risks in global debt cycles. In a recent interview, Dalio emphasized that the next financial crisis is more likely to stem from sovereign debt-driven by rising U.S. public debt, geopolitical tensions, and central-bank interventions-rather than traditional market excesses. The Federal Reserve's decision to halt quantitative tightening and reinvest income into Treasury bills has further fueled concerns about liquidity injections creating asset bubbles.

NVIDIA, a key beneficiary of AI-driven demand, has seen its market valuation soar, but Bridgewater's retreat suggests a reassessment of risk amid tightening fiscal and monetary conditions.

Bridgewater's Q3 portfolio adjustments also highlight a shift toward diversified exposure. The firm increased its holdings in SPDR S&P 500 ETF (SPY) and iShares Core S&P 500 ETF (IVV), which now constitute 6.51% and 5.78% of its portfolio, respectively. These positions provide broad market exposure while hedging against sector-specific volatility. Meanwhile, Bridgewater's reduced NVIDIA stake contrasts with other hedge funds, such as David Tepper's Appaloosa Management, which increased its position in the chipmaker to 1.9 million shares.

The decision to scale back NVIDIA exposure comes as the company faces regulatory headwinds. Amazon and Microsoft have joined efforts to restrict exports of advanced AI chips to China under the GAIN AI Act a move that could impact NVIDIA's global market share. Additionally, NVIDIA's strategic investments in AI infrastructure-such as Firmus Technologies' $500 million data center project in Australia- highlight its long-term growth potential but underscore short-term regulatory and geopolitical uncertainties.

Bridgewater's actions reflect a macroeconomic playbook typical of Dalio's "Big Debt Cycle" framework: as debt burdens grow unsustainable, central banks often resort to liquidity injections, inflating asset prices before eventual corrections. With U.S. public debt exceeding $38 trillion and equity valuations trading at historically narrow spreads relative to Treasury yields, Bridgewater's cautious stance on high-growth tech stocks may signal anticipation of a market recalibration.

The firm's Q3 moves also align with its emphasis on diversification and flexibility. Dalio's "smart rabbit" strategy-advocating for multiple hedging positions- resonates in Bridgewater's increased ETF allocations and reduced concentration in individual equities. While NVIDIA remains a critical player in the AI revolution, Bridgewater's reduced stake underscores a preference for balancing innovation-driven growth with systemic risk mitigation.