Duolingo down 80% from peak

Duolingo is having the kind of stock collapse that forces a real argument. Not a “market is jittery” argument — a business-model argument. The app is still growing, still profitable, and still one of the strongest consumer education brands on the internet. But the stock has fallen from a May 14, 2025 closing high of $540.68 to about $106.82 on April 29, 2026, which is roughly an 80% drawdown. (macrotrends.net) ### What changed? The immediate setup is the May 4, 2026 earnings report. Duolingo said it will release first-quarter results after the market closes that day, with the call at 5:00 p.m. ET. That date matters because investors are no longer paying for the old story automatically — they want evidence that growth can hold up under a more aggressive AI strategy. (investors.duolingo.com) ### Why did the stock fall so hard? The simple version is valuation first, then fear. Duolingo was priced like a near-perfect consumer software compounder at more than $500 a share last year. Once investors started asking whether generative AI makes l(investors.duolingo.com)out 80%. (macrotrends.net) ### Why is AI the whole debate? Because AI cuts both ways. The bull case says Duolingo can use AI to create lessons faster, ship new features, and widen the gap with smaller rivals. The bear case says AI also lowers the moat around the core product — if tutoring, translation, and personalized practice become c(macrotrends.net)an look cheap to one investor and still look dangerous to another. (finance.yahoo.com) ### Is the business actually broken? Not from the numbers we have so far. In its 2025 shareholder materials, Duolingo said it surpassed 50 million daily active users, generated more than $1 billion in bookings, more than $400 million in net income, and over $300 million in adjusted EBITDA. Th(finance.yahoo.com). (investors.duolingo.com) ### So why aren’t investors impressed? Because markets care about the next step, not just the last one. If Duolingo pushes harder on user growth — especially with AI features and broader access — investors worry that monetization could soften. That is the catch. A company can grow users fast and st(investors.duolingo.com) (fool.com) ### What are bulls looking for on May 4? They want proof that Duolingo can keep growing without giving away the economics. That means healthy bookings, steady paid conversion, and guidance that says AI is improving the product faster than it is eroding pricing power. If management can show that user expansion still feeds revenue instead of diluting it, the stock probably gets room to breathe again. (fool.com) ### What are bears looking for? Any sign that the app is becoming a great product but a worse business. Slower revenue growth, weaker bookings, softer full-year guidance, or commentary that suggests AI is forcing Duolingo to trade margin for reach — any of those would reinforce the idea that the old premium was built for a pre-AI market. (finance.yahoo.com) ### Bottom line This is not really a story about whether people still like Duolingo. They clearly do. It is a story about whether AI makes Duolingo stronger faster than it makes language learning generic. The May 4 report will not settle that forever — but it should tell investors whether this 80% collapse is a reset in expectations or the start of a deeper rerating. (macrotrends.net)