Okay, let’s talk Duolingo (DUOL +0.45%). Because honestly, the market’s reaction to this stock lately has been…a choice. Down 70% over the last year? That’s not a dip, that’s a swan dive. And look, I get it. Investors are easily spooked. It’s like bringing a snow globe to a wind tunnel. But here’s the thing: pessimism is always where the opportunity is. Especially when earnings drop on February 26th.
This stock was briefly trading at levels that suggested everyone thought Duolingo was going to solve world peace and teach everyone Klingon. A little rich, even for a language learning app. But to see it crater to around $100? That’s like throwing out the baby with the Rosetta Stone. It’s overdone. And as someone who likes a good return on investment, I’m taking notice.
Understanding the AI Existential Crisis
Duolingo, for the uninitiated, is where you go to learn a language. Spanish, French, even High Valyrian if you’re into that. It gamifies the process, which is smart. Because let’s be real, memorizing vocabulary is about as fun as a root canal. They’ve also expanded into math and chess, which…okay, that’s a pivot. But a potentially lucrative one.
AI isn’t new. ChatGPT launched over three years ago, and the hype cycle peaked approximately six months later. People who were going to ditch Duolingo for a chatbot probably already have. And yet, Duolingo continues to…grow. It’s like a cockroach. But a financially solvent, publicly traded cockroach.
They now have over 50 million daily active users. That’s a lot of people attempting to conjugate verbs. And it translated into 41% year-over-year revenue growth in Q3. Impressive. Even more impressively, language learning isn’t even the biggest driver of growth anymore. Chess is. Apparently, everyone is suddenly desperate to beat Magnus Carlsen.
And people are still paying for subscriptions. 11.5 million paid subscribers, up 34% year-over-year. That’s a solid number. It suggests that people are actually getting value from the service, or they just have a very strong desire to avoid awkward tourist interactions.
So, the 70% crash is fueled by anxiety over AI. But the financials suggest the opposite is happening. Duolingo looks poised to deliver results that will re-establish it as a growth stock. And I predict investors will suddenly rush back in, because that’s what investors do. They chase momentum. It’s a beautiful, terrifying cycle. Don’t say I didn’t warn you.
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2026-02-16 08:52