Bubbles on a automatic dip stick can be VERY bad. The main job of automatic transmission fluid is as hydraulic fluid. You cannot compress a liquid and that is important to any hydraulic system. The second you add air bubbles to the fluid it stops being a good hydraulic fluid and become as easy to compress as the air trapped in it. The fastest way to ruin a transmission is to over fill it to the point the spinning parts “whip” air into the fluid. At that point the life of your transmission is measured in minutes not years.

A couple of bubble on the dips stick after a hard ¼” mile run is no big deal because the bubble will float on top or the fluid, this may be an indicator that you need a deeper trans pan for more volume due to high RPMs, but a lot of bubbles while Idling indicates issues that needs resolved.

Besides overfilling the most common cause for air in the fluid is a bad seal at the filter. IMO it would be one of the top 10 reasons for needing a rebuild on stock trans that have not seen any abuse.

 

Let's try not to hijack this guys five and a half year old thread...lol.
Overfilling the automatic trans can cause foaming in the fluid. Check your level, having air bubbles isn't normal.