Duolingo Shares Fall 3.95% Amid Legal Scrutiny and Analyst Downgrades as Trading Volume Surges 46% to 660 Million Ranking 154th in Market Activity

On August 22, 2025, Duolingo (DUOL) closed with a 3.95% decline, trading at a daily volume of $660 million, a 46.32% surge from the prior day. The stock ranked 154th in market activity. Legal scrutiny and analyst concerns weighed on sentiment, despite recent earnings growth and strategic clarifications.

Pomerantz LLP launched an investigation into potential securities violations at Duolingo, heightening legal risks. Separately, JMP Securities cut its price target to $450, citing decelerated daily active user growth to 39% year-over-year in Q2—a drop from 51% in Q1. Insiders also sold shares, with Rep. Lisa C. McClain offloading between $1,001–$15,000 worth of DUOL stock, signaling caution among stakeholders.

Positive momentum emerged from Duolingo’s Q2 results, reporting $252 million in revenue, and CEO Luis von Ahn’s defense of the “AI-first” strategy, which emphasized no immediate job cuts. However, mixed investor reactions persisted amid ongoing legal and operational uncertainties.

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