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Duolingo Inc. (NASDAQ: DUOL) has seen its stock price rebound approximately 70% after dropping over 80% last year amid fears of competition from AI chatbots like ChatGPT. This turnaround was bolstered by an upgrade from Evercore analyst Mark Mahaney, who has set a new price target of $210, suggesting more than 30% upside from current levels.
The company reported that daily active users have recently reached an all-time high, with retention rates exceeding 80%. Additionally, Duolingo is expanding its offerings beyond language learning, incorporating subjects like math and chess while utilizing AI to reduce costs significantly. Despite these gains, concerns continue regarding the conversion of users into paying subscribers and potential competition from new AI rivals.
Duolingo’s position suggests that AI may be more of an ally than a threat, as users reportedly employ both the app and AI tools concurrently. This indicates that engagement levels remain strong, potentially setting the stage for a significant recovery akin to that of Netflix in 2022.
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