Duolingo (NASDAQ: DUOL) operates the world’s largest digital language education platform. Its stock surged during 2024 and 2025 to hit a record high of about $540 in May of last year, but it has since plummeted by more than 75% amid concerns that artificial intelligence-powered translation tools could reduce demand for language lessons.
Plus, Duolingo’s executive team recently made a business decision to prioritize user growth over the next couple of years, at the expense of monetization. As a result, Wall Street is pricing in less revenue and earnings growth, which has further contributed to the stock’s decline.
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However, I think the sell-off is overdone. Duolingo has already proven it can use AI to improve its platform, and focusing on user growth in the near term could lead to significantly higher revenue over the long term. The stock is now incredibly cheap, so here’s why I predict it will double by the time 2027 rolls around.
AI could be a tailwind, not a risk, for Duolingo
Duolingo’s mobile-first approach and highly interactive lessons are the secrets to its success. Around 56.5 million people used its app every single day during the first quarter, and while most of them were free users whom the company monetized through advertising, 12.5 million users were paying for subscriptions to unlock extra features.
A growing number of those features are powered by AI. Users who pay for a Super Duolingo or Duolingo Max plan can access Video Call, which features a digital avatar that helps them practice their foreign language speaking skills. During the first quarter, the number of spoken words per user who engaged with this tool more than doubled compared to the year-ago period, so it’s clearly proving to be popular.
Because of the success of Video Call, Duolingo plans to introduce more speaking-based lessons for free users to increase the platform’s popularity. This is one of the ways the company is sacrificing monetization in the short run: Making speaking-based tools more widely available will diminish the value of paid features like Video Call, but it could significantly increase the platform’s overall user base in the long run.
A growing user base will be a net positive over the long term
Management’s decision to sacrifice monetization in favor of faster user growth is already having a negative impact on Duolingo’s financial performance. Revenue increased by 27% year over year during the first quarter, which was a solid result at face value, but a deceleration from its 38% growth in the same quarter of 2025.