Why Duolingo (DUOL) Is Down 6.6% After Google Unveils New AI Language Tools and What’s Next

• In August 2025, Google unveiled a suite of AI-powered live translation and language learning tools, directly increasing competition for language-learning platforms like Duolingo.
• This move by a major technology company introduces advanced free offerings that could reshape the market and challenge Duolingo’s established user engagement model.
• We’ll explore how Google’s new AI language tools may influence Duolingo’s future growth prospects and competitive positioning.

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Duolingo Investment Narrative Recap

To hold Duolingo stock, an investor needs to believe that the company’s recognizable brand, strong track record in gamified learning, and continued international growth will help it defend market share and monetize a broad audience, even as larger tech firms introduce competitive AI solutions. Google’s latest AI-powered language tools increase competitive risk, but the key short-term catalyst remains Duolingo’s ability to maintain engagement and scale in high-growth regions; while the risk of DAU and MAU slowdown in core markets is increasingly material.

The most relevant recent announcement is Duolingo’s Q2 2025 earnings report, which showcased significant revenue growth to US$252 million and higher net income, reinforcing its operational strength and demand. This result is particularly important amid rising competition, as Duolingo’s ability to grow the top line and deliver profitability is central to shareholder confidence and to offset pressure on user retention and pricing power in core and emerging markets.

However, with competition heating up from global tech giants, there is an increasing risk for investors that...

Read the full narrative on Duolingo (it's free!)

Duolingo's outlook anticipates $1.8 billion in revenue and $373.2 million in earnings by 2028. Achieving this would require 25.9% annual revenue growth and a $256 million increase in earnings from the current $117.2 million.

Uncover how Duolingo's forecasts yield a $489.76 fair value, a 52% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members gave Duolingo fair value estimates ranging from US$265 to US$712 across 20 individual views. While opinions on valuation vary, many are watching how intensifying competition from Google’s AI language offerings could alter Duolingo’s future growth story, reminding you to explore a full range of market perspectives before making up your mind.

Explore 20 other fair value estimates on Duolingo - why the stock might be worth 18% less than the current price!

Build Your Own Duolingo Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Duolingo research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Duolingo research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Duolingo's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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