Ray Dalio’s a brilliant investor who’s worth paying close attention to, not just because of his impressive wealth-compounding track record, but because the man knows the importance of balancing risk with reward. Undoubtedly, when it comes to building wealth, it’s more than just about going for growth. The brilliant investors, like Dalio, know that the risk side of the equation is just as important, if not more so.
In any case, this piece will have a closer look at moves made by Dalio’s legendary Bridgewater Associates. They’re wise moves, which I think could suggest where the value is in today’s choppy market that has no shortage of risks. Here are two value buys that I think scream deep value.
Of course, not everybody is going to have the courage to jump into the side of the pool where there’s deeper value to be had, since it often entails buying stocks that have fallen upon hard times. Either way, the following names, which Bridgewater scooped up in the fourth quarter of last year, I think, are more than worthy of the watchlist this April.
Oracle
First, we have shares of Oracle (NYSE:ORCL | ORCL Price Prediction), which just came off one of its best days in a while, gaining just shy of 13% in a single day, clawing back the losses it had in the past month. There might be more massive big up days for Oracle as investors look to pick up a software bargain in weakness. Oracle isn’t just a software play that’s overspending to make a splash into AI infrastructure, though.
The company looks far more agent-first than most other software companies under the microscope. And with explosive growth to be had from OCI (Oracle Cloud Infrastructure), I do think that the name is a deep-value play for investors willing to look beyond the debt load and beyond the fearful headlines that suggest AI is eating software for lunch.
The latest advancement in AI (think Claude Mythos) really bodes well for the future of AI compute. And despite any hurdles or risks ahead, I do think the high degree of perceived risk is balanced well by the considerable rewards to be had if the company gets things right with AI. In my view, Bridgewater’s Q4 bet gives me confidence in a name that investors are too quick to count out.
At 27.9 times trailing price-to-earnings (P/E), the name is a bargain if you think the world just cannot get enough AI compute, which may very well be the case since constraints might only allow a portion of AI demand to be met in the coming years. Could the base case actually lie closer to the bull case? As always, time will tell, but I do think the more than 50% haircut in the stock is overdone.
Nvidia
Next, we have Nvidia (NASDAQ:NVDA), which might come off as a bit of a surprise, given the debate surrounding whether or not the GPU maker is actually a legit value play.
How many value stocks do you know that have risen over 1,000% in five years? Probably not that many. Either way, I think the value case has strengthened after around eight months of doing nothing. The multiple has compressed to a reasonable level (38.6 times trailing P/E), especially given that AI demand remains incredibly hot.
In prior pieces, I outlined competition, rather than a fizzling of the AI boom, as a top threat to Nvidia’s growth and margins. As long as Jensen Huang keeps delivering impressive performance gains, though, I think the picture-perfect environment could have some number of years to go, as the AI infrastructure shift moves ahead.
As Nvidia stock starts garnering momentum, I think the rewards far outweigh the risks, even as famed short Michael Burry adds to his bearish put position.
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