Duolingo Stock Plummets After Slowing User Growth, Possibly Caused By 'AI-First' Backlash (fool.com) 18
"Duolingo stock fell for the fourth straight trading day on Wednesday," reported Investor's Business Daily, "as data shows user growth slowing for the language-learning software provider."
Jefferies analyst John Colantuoni said he was "concerned" by this drop — saying it "may be the result of Duolingo's poorly received AI-driven hiring announcement in late April (later clarified in late May)." Also Wednesday, DA Davidson analyst Wyatt Swanson slashed his price target on Duolingo stock to 500 from 600, but kept his buy rating. He noted that the "'AI-first' backlash" on social media is hurting Duolingo's brand sentiment. However, he expects the impact to be temporary.
Colantuoni also maintained a "hold" rating on Duolingo stock — though by Monday Duolingo fell below its 50-day moving average line (which Investor's Business Daily calls "a key sell signal.")
And Thursday afternoon (2:30 p.m. EST) Duolingo's stock had dropped 14% for the week, notes The Motley Fool: While 30 days' worth of disappointing daily active user (DAU) data isn't bad in and of itself, it extends a worrying trend. Over the last five months, the company's DAU growth declined from 56% in February to 53% in March, 41% in April, 40% in May [the month after the "AI-first" announcement], and finally 37% in June.
This deceleration is far from a death knell for Duolingo's stock. But the market may be justified in lowering the company's valuation until it sees improving data. Even after this drop, the company trades at 106 times free cash flow, including stock-based compensation.
Maybe everyone's just practicing their language skills with ChatGPT?
Jefferies analyst John Colantuoni said he was "concerned" by this drop — saying it "may be the result of Duolingo's poorly received AI-driven hiring announcement in late April (later clarified in late May)." Also Wednesday, DA Davidson analyst Wyatt Swanson slashed his price target on Duolingo stock to 500 from 600, but kept his buy rating. He noted that the "'AI-first' backlash" on social media is hurting Duolingo's brand sentiment. However, he expects the impact to be temporary.
Colantuoni also maintained a "hold" rating on Duolingo stock — though by Monday Duolingo fell below its 50-day moving average line (which Investor's Business Daily calls "a key sell signal.")
And Thursday afternoon (2:30 p.m. EST) Duolingo's stock had dropped 14% for the week, notes The Motley Fool: While 30 days' worth of disappointing daily active user (DAU) data isn't bad in and of itself, it extends a worrying trend. Over the last five months, the company's DAU growth declined from 56% in February to 53% in March, 41% in April, 40% in May [the month after the "AI-first" announcement], and finally 37% in June.
This deceleration is far from a death knell for Duolingo's stock. But the market may be justified in lowering the company's valuation until it sees improving data. Even after this drop, the company trades at 106 times free cash flow, including stock-based compensation.
Maybe everyone's just practicing their language skills with ChatGPT?
AI slop = 10+yrs/4+yrs Diamond league and I'm out (Score:5, Interesting)
Out. Done. Gone. Waste of my time, every damn day.
The decline in quality and accuracy was just too much. As an English speaker learning a handful of other languages and concentrating on two, it was interesting to me that the first real noticeable patterns of errors and general slop were actually on the English side. Increasingly obtuse questions or statements, ok fine, I will spit those back in French or Spanish with good accuracy. I don't have any issue whatever with the occasionally-dark humor or the gender related topics that might push others' hot buttons, and I appreciate the occasional foray into curious stories and situations. But... over the past year there has been an increasing level of nonsensical AI-generated questions, erroneous answers accepted, multiple correct answers, etc etc... and it's obvious that no actual native speaker looked at a lot of the new content -- either from the native or foreign perspective. A couple years ago there was an increasing level of having to hit the button for "You should have accepted my answer." But for the past year, it's become a daily occurrence to have to hit the button for "You shouldn't have accepted my answer." The latter is a clear indication of AI slop and drift in the language models, and lack of QA. Real human QA is not optional, and Duo has apparently dispensed with it entirely. The result is gameified garbled nonsense. Playing the game was fun for a while (seriously, still in Diamond league for more than four years straight), but the goal is language learning not to compete with other stupid little games on my device. Feh. Done. Cancelled my subscription, et je vais dépenser cet hundred bucks de mon argent pour un spritz et une charcuterie chaque après-midi pour le reste de l'été.
Re:AI slop = 10+yrs/4+yrs Diamond league and I'm o (Score:4, Insightful)
"AI" is an oxymoron and as soon as people figure that out the better. At least contemporary unthinking, illogical, and delusional stochastic regurgitation AI is. Total disaster and incredible waste of resources too.
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Caution (Score:1)
Caution: Don't mistake some schadenfreude to be an accurate indication of the future.
Duo Lingo's stock dip, and it's causes, are not a sign that the AI revolution will not come to pass.
Re: (Score:1)
Our species is not ready to make 20 to 30% of it redundant. If you know history, and not a lot of people around here do, then you know that there was massive amounts of technological unemployment following the last two industrial revolutions.
The actual solution to that was two world wars.
Skyrocketed the ads, and harder to get stars (Score:2)
It has gone from reasonable amount of ads to utterly insane (especially for iPhone users).
It is now much easier to lose stars and harder and longer to get them back. They want to force users to subscriptions and are being obnoxious about it.
Re: (Score:2)
That, and the stupid "path". I quit using it when it stopped letting you pick what to do next.
Does anyone want to learn anything anymore? (Score:2)
"Maybe everyone's just practicing their language skills with ChatGPT?"
Or: Maybe no one's practicing any skills whatsoever anymore, because they expect answers will always be available on-demand via ChatGPT (et. al.)
They stopped improving (Score:2)
The writing was on the wall when they stopped adding new languages. As an example, 1000s of potential users have been asking for Thai - but Duolingo isn't interested (but they have Klingon). If no new languages are added - your potential user growth at some point is limited to the rate of natural growth of population, at most. Add to that AI bs, and there you go.
Still higher than before AI announcement (Score:2)
$384 before AI announcement, $540 peak after it, $411 right now and it seem to have stabilised.
It could be AI, or (Score:2)
It feels that every few months Duolingo ups the amount of distraction inside their app. The amount of garbage you have to click through after every lesson has been too much for too long (especially since you have to wait for the various animations to complete before you can click past them). Recently they’ve added annoying lightning flashes inside the lessons, as well as dribbling animations about XP every time you answer a question correctly. It was annoying, now it’s borderline intolerable. I
Rational value assessment (Score:2)
Sacrificed at the altar of infinite growth (Score:2)
Still growing but not as much, you must be a shit company.
Duh (Score:2)
My recentish experience with a Duolingo user (Score:2)
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