What Happened?

Shares of language-learning app Duolingo (NASDAQ: DUOL) fell 7.3% in the morning session after the stock's weakness continued as Google unveiled a suite of new AI-powered language learning tools, signaling a significant increase in competition. 

The move by the tech giant introduces advanced, free offerings that could challenge Duolingo's market position and user engagement model. Google's entry into the language-learning space raises concerns among investors about Duolingo's future growth prospects and its ability to compete against a major corporation with vast resources.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Duolingo? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Duolingo’s shares are extremely volatile and have had 35 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 3 days ago when the stock dropped 3% on the news that Google announced new artificial intelligence-powered live translation and language learning tools, signaling a potential threat to Duolingo's market position. The new features, integrated into Google Translate, include a language practice tool that uses Gemini AI models to create customized listening and speaking sessions adapting to a user's skill level. Google's enhancement of its free language learning offerings with these advanced AI tools represents increased competition for Duolingo, which has built its business around gamified language learning applications. Investors appear concerned that the tech giant's move into more sophisticated language education could challenge Duolingo's growth and user base.

Duolingo is down 8.3% since the beginning of the year, and at $298.87 per share, it is trading 44.7% below its 52-week high of $540.68 from May 2025. Investors who bought $1,000 worth of Duolingo’s shares at the IPO in July 2021 would now be looking at an investment worth $2,150.

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