Duolingo's Volume Slumps to 371st as High-Liquidity Strategies Outperform Markets with 166 Return

On August 1, 2025, Duolingo (NASDAQ: DUOL) closed at $338.99, down 2.18% from its previous close, with a trading volume of $0.34 billion, a 20.89% decline from the prior day’s volume. The stock ranked 371st in trading activity across the market, reflecting mixed investor sentiment amid unfolding developments.

A securities investigation has been initiated by Levi & Korsinsky against Duolingo, alleging potential violations of federal securities laws. This follows a downgrade of the stock’s price target by JMP Securities from $475 to $450. The firm cited concerns over slowing user engagement, with third-party data showing daily active user growth decelerating to 39% year-over-year in Q2 2025, down from 51% in Q1. The firm’s analysis highlighted risks ahead of the company’s earnings report.

The strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day delivered a 166.71% return from 2022 to the present, outperforming the benchmark return of 29.18% and generating an excess return of 137.53%. This underscores the effectiveness of high-liquidity strategies in capturing short-term market opportunities during periods of rapid capital reallocation.