We recently published a list of Billionaire Ray Dalio’s Bridgewater’s 10 Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Block, Inc. (NYSE:XYZ) stands against Billionaire Ray Dalio’s Bridgewater’s other stock picks with huge upside potential.
Up until February 18, 2025, the stock market seemed poised to replicate the 2020-2022 bull run. Save for slight corrections in April and August of 2024, the market was in a general upside trend. And investors expected the trend to intensify, thanks to the Trump effect. But before President Trump’s re-election, some voices, including that of Ray Dalio, pointed out the potential risks of this presidency to the market.
Ray Dalio established Bridgewater Associates in 1975. But as of 2025, the billionaire investor isn’t part of the hedge fund’s key management. He currently acts as co-chief investment officer (CIO) mentor and member of the Bridgewater Board. Dalio also runs his family office, the Dalio Family Office, which manages over $15 billion in assets. He also does philanthropy work and he hasn’t stepped away from sharing his economic and investment insights through books, interviews, and social media.
Bridgewater has grown to become the largest and most renowned investment firm in the world. Over the past 10 years, the fund has returned 39.40%, and 17.30% over the past 12 months. However, just like Dalio predicted, the Trump administration’s policies could jeopardize Bridgewater’s ability to reward investors.
Since taking office for the second term, Trump has made tariffs a key part of his government’s economic policy. He issued an executive order on his first day in office and threatened 25% tariffs on all goods from China, Canada, and Mexico. The tariffs escalated through Liberation Day in April. All this time, the S&P 500 was taking one hit after another. For instance, the broad market index pulled back 12% between April 2 and April 8, 2025. April 2 happens to be the day of Trump’s Liberation Day speech that marked a major tariff escalation.
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Although the equity market appears to be correcting as of May 1, 2025 (the S&P 500 is up 12% since April 8), Dalio believes that Trump’s tariffs have wrought irreversible damage. According to a post on X on Monday, Dalio said that many of his indicators tell him that “we are on the brink of the monetary order, the domestic political and the international world orders breaking down due to unsustainable, bad fundamentals.”
While appearing on NBC’s “Meet the Press” show recently, Dalio sustained his dissatisfaction with Trump’s tariffs. According to the billionaire investor, President Trump’s actions are pushing the US to the brink of recession, or potentially “something worse.” He specifically pointed out the chaotic implementation of tariffs, which have caused global market volatility and economic uncertainty.
If Dalio is trying to say that the market is spooked, he is not wrong. According to the CBOE Volatility Index or VIX (which measures market sentiment), investors are very frightened. The index rose to the highest level in five years after the Liberation Day speech but climbed down afterward. Nevertheless, the index is still up 14% from where it was 30 days ago.
Amid the heightened fear in the equities market, Dalio’s Bridgewater continues to register gains. In Q1 2025 alone, the fund rose 9.9%. That the fund can post such growth in a difficult market speaks volumes about its management. This is why it is prudent to learn more about the billionaire’s stock picks with huge upside potential.
Our Methodology
We sifted through Bridgewater Associates SEC Q4 2024 13F filings. We focused on the fund’s most valuable equities holdings (excluding ETFs and options) and then ranked the stocks based on analyst price targets (as of May 2). We picked stocks with an upside potential of at least 30% and then ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Ray Dalio of Bridgewater Associates
Block, Inc. (NYSE:XYZ)
Bridgewater Associates Stake Value: $104,538,210
Upside Potential as of May 2: 43.43%
Number of Hedge Fund Holders: 81
Block, Inc. (NYSE:XYZ) is a US-based financial technology company. Formerly known as Square Inc., the company offers point-of-sale hardware and software that allow businesses to easily accept credit card payments. It also offers the Cash App platform, which enables peer-to-peer money transfers and bitcoin trading.
Block, Inc.’s (NYSE:XYZ) Q1 2025 earnings report just came out and shows disappointing results. Revenue came in at $5.77 billion against the $6.20 billion forecast. EPS was $0.56, well below the analyst expectations of $0.87. The underwhelming performance has a lot to do with a slowdown in the Cash App segment. This segment saw gross profit growth decelerate to just 10% year-over-year, down from 25% in the previous year.
CEO Jack Dorsey acknowledged in his letter to shareholders. “Our growth in the first half of this year does not meet our bar,” he owned up. The company’s Square segment performed better, with a gross profit of $898 million, a 9% increase.
The earnings miss prompted Block, Inc. (NYSE:XYZ) to cut its profit forecast for 2025. It reduced its guidance for annual gross profit growth from 15% to 12%. The company cited concerns about consumer spending patterns, particularly noting a pronounced impact on discretionary spending in travel and media.
CFO Amrita Ahuja explained that they are “operating in a more dynamic macro environment,” which has led them to adopt “a more cautious stance on the macro outlook.”
On May 2, 2025, Raymond James maintained an Outperform rating on Block, Inc. (NYSE:XYZ) but reduced the price target from $103.00 to $74.00. The adjustment follows the company’s first-quarter results, which presented a mixed financial picture, the firm wrote in a research note.
Overall, XYZ ranks 5th on our list of Billionaire Ray Dalio’s Bridgewater’s stock picks with huge upside potential. While we acknowledge the potential of XYZ as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than XYZ but that trades at less than 5 times its earnings check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.