Duolingo is now down 5% as Apple details translation feature

Duolingo is now down 5% as Apple details translation feature

Duolingo (DUOL) saw its stock price drop by 5% on September 9, 2025, following Apple's announcement of a new translation feature. The decline occurred despite Duolingo's robust Q2 2025 earnings report, which highlighted a 41% year-over-year revenue surge to $252.3 million and a net income increase to $45 million. This discrepancy underscores the market's sensitivity to competitive threats and potential regulatory challenges.

The latest earnings report from Duolingo demonstrated significant growth, driven by AI-powered monetization and user engagement strategies. The company's AI-first approach, which includes features like Duolingo Max and a gamified "Energy" system, has boosted average revenue per user (ARPU) and daily active users (DAUs) by 5–6% and 40%, respectively. Despite these positive indicators, the stock price has been negatively impacted by Apple's new translation feature, which could potentially cannibalize Duolingo's user base.

Analysts remain bullish on Duolingo's long-term prospects, with an average price target of $451.87 and some firms projecting as high as $600 per share. However, the recent stock price pullback suggests that investors are factoring in near-term challenges such as regulatory hurdles in China and increased competition from tech giants like Google. The market's focus on short-term metrics may be overshadowing Duolingo's strategic pivot towards monetization and international expansion.

In summary, while Duolingo's Q2 2025 earnings report showcased strong financial performance, the stock's recent decline reflects investor concerns about competitive pressures and regulatory challenges. The market's reaction to Apple's translation feature announcement highlights the need for investors to carefully consider both the short-term and long-term growth prospects of the company.

References:
https://simplywall.st/stocks/us/consumer-services/nasdaq-duol/duolingo/news/duolingo-duol-reports-q2-2025-sales-surge-to-us252-million
https://www.ainvest.com/news/duolingo-q2-2025-revenue-surge-high-conviction-growth-investment-ai-driven-edtech-revolution-2509/