Duolingo Soars 12.93% on Analyst Upgrades Surges to $1.13B Volume Ranks 58th in Active Trading Amid AI-Driven Growth and Viral Campaigns

On August 18, 2025, Duolingo (NASDAQ:DUOL) surged 12.93% with a trading volume of $1.13 billion, marking a 223.51% increase from the previous day and ranking 58th among the most actively traded stocks. The rally followed analyst upgrades and strategic developments addressing market concerns.

KeyBanc Capital Markets upgraded Duolingo to "overweight" from "sector weight," citing underappreciated momentum in user engagement. The firm highlighted the rollout of the "Energy" feature, which has boosted daily active users and session duration in early tests. Analysts emphasized that AI-driven language tools are more likely to enhance monetization rather than suppress demand, countering recent investor fears about market saturation.

Strategic product updates, including planned announcements at Duocon in September and a return to viral marketing campaigns, were identified as key growth catalysts. KeyBanc raised its 2026 and 2027 EBITDA forecasts by 4-7%, projecting a three-year EBITDA compound annual growth rate of approximately 44%. Price optimization in select markets was also noted as a potential revenue driver, with limited testing already showing margin expansion potential.

A strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day generated a 23.4% cumulative return from 2022 to the present, yielding $2,340 in profit. This moderate performance underscores the conservative nature of volume-based trading approaches in the given timeframe.