Duolingo Stock Plummets 5.19% as $850M Volume Ranks 116th Amid AI Fears and Profit-Taking

On August 12, 2025, Duolingo (NASDAQ:DUOL) closed at $322.88, down 5.19% from the previous session, with a trading volume of $850 million, ranking 116th in market activity. The decline followed a week of strong momentum after the company’s Q2 2025 earnings report, which highlighted 41% year-over-year revenue growth and a 46% increase in subscription revenue. However, recent volatility reflects investor caution amid competitive pressures and profit-taking.

The stock’s pullback coincided with OpenAI’s demonstration of GPT-5’s language-learning capabilities, signaling potential disruption in the edtech space. Analysts also noted that the move aligns with broader market trends, including reduced interest in AI-driven stocks post-earnings rallies. Despite these challenges, Duolingo’s expansion into music and chess courses, alongside AI-powered growth strategies, remains a key focus for long-term investors.

Short-term selling pressure emerged from insider transactions, including co-founder Severin Hacker’s sale of nearly 10,000 shares. Meanwhile, user concerns over aggressive premium paywalls and AI-first product shifts have sparked mixed sentiment, though these factors have not significantly dented user growth metrics. Analysts at Morgan Stanley and JPMorgan have maintained optimistic price targets, citing the company’s resilient subscriber base and diversified content pipeline.

A backtest of a strategy involving the top 500 high-volume stocks held for one day yielded a $2,340 profit from 2022 to 2025. However, the approach faced a maximum drawdown of -15.3% on October 27, 2022, underscoring the inherent risks of short-term trading in volatile markets.