Analyst Predicts Internet Stocks Will Require AI Profits by 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 18 2025
0mins
Should l Buy DUOL?
Source: Benzinga
Internet Stocks Performance: Internet stocks are struggling as they lagged behind the S&P 500 and Russell 2000 in 2025 due to operational missteps, increased competition from generative AI, and inconsistent margins, despite a stable macroeconomic environment.
2026 Outlook on AI Monetization: Analysts emphasize that for internet companies to maintain valuations in 2026, they must show significant progress in AI monetization and profitability, alongside improved execution.
Stock-Specific Insights: JP Morgan's analyst Bryan M. Smilek rates Duolingo and Coursera as Overweight, citing potential for growth, while Etsy and Udemy are rated Neutral, and Nerdy Inc. and Chegg are Underweight due to negative sentiment and performance concerns.
AI Integration in Education: The integration of AI in education is expected to diversify traffic sources and enhance learning products, with companies that leverage enterprise tech and proprietary content being better positioned for success in this shift.
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Analyst Views on DUOL
Wall Street analysts forecast DUOL stock price to rise
17 Analyst Rating
10 Buy
6 Hold
1 Sell
Moderate Buy
Current: 94.120
Low
160.00
Averages
260.36
High
330.00
Current: 94.120
Low
160.00
Averages
260.36
High
330.00
About DUOL
Duolingo, Inc. is a technology company. The Company is engaged in offering a mobile learning platform, as well as a digital English language proficiency assessment exam. It operates a freemium business model, namely, the app and the Website are accessible free of charge, although Duolingo also offers premium services for a subscription fee. Its solutions consist of the Duolingo App, Super Duolingo, Duolingo Max, Duolingo English Test: AI-Driven Language Assessment, Duolingo for Schools, and Duolingo ABC. The Duolingo App offers courses in over 40 different languages, including Spanish, English, French, German, Italian, Portuguese, Japanese and Chinese. Duolingo can also be accessed on desktop computers via a Web browser. Its subscription offering, Super Duolingo, offers learners additional features to enhance their learning experience. The Duolingo English Test is an online, on-demand, high-stakes English proficiency assessment. It also operates an animation and motion design studio.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Duolingo Stock Plummets, Shifts Focus to User Growth
- Stock Plunge: Duolingo's stock has fallen over 80% from its peak above $500 to around $100, raising concerns about its future despite solid 2025 performance with revenue growth of approximately 39%, annual bookings exceeding $1 billion, and net profit increasing from $89 million to $414 million.
- Slowing User Growth: While the platform boasts over 50 million daily active users, the growth rate has slowed to about 30% in Q4 2025, down from over 40% historically, with management projecting a further decline to 20% in 2026, potentially impacting future revenue expansion.
- Strategic Reset: To reignite user growth, Duolingo is prioritizing user experience in 2026, targeting 100 million daily active users by 2028, even as it lowers bookings growth guidance to 10%-12%, indicating a clear shift towards user acquisition over immediate profitability.
- Utilization of AI Tools: Duolingo is leveraging AI tools to enhance personalized learning experiences, such as the Video Call feature with AI agent Lily, which allows learners to practice speaking in a safe environment, potentially increasing user engagement and driving long-term economic benefits.
See More
Duolingo's User Growth Slowdown Raises Investor Concerns
- User Growth Slowdown: Duolingo's daily active user growth rate has slowed to around 30% in Q4 2025, down from over 40% previously, with management projecting a further decline to about 20% in 2026, which could impact the company's long-term revenue growth.
- Revenue and Profit Performance: Despite the slowdown in user growth, Duolingo achieved a 39% revenue increase in 2025, with annual bookings surpassing $1 billion and net profit rising from $89 million to $414 million, demonstrating the resilience of its core business.
- Strategic Shift: The company plans to prioritize user growth and the free learner experience in 2026, even at the cost of short-term profitability, targeting 100 million daily active users by 2028, indicating a strong focus on future growth.
- Market Risks and Opportunities: Investors must weigh whether Duolingo's core business model can balance user growth and monetization; if execution fails, it could lead to slower revenue expansion and margin compression, affecting long-term economic viability.
See More
Faruqi & Faruqi Investigates Duolingo Investor Losses
- Legal Investigation Launched: Faruq & Faruqi, LLP is investigating potential claims against Duolingo (NASDAQ:DUOL), indicating that the company may face legal liabilities for significant investor losses.
- Investor Rights Advocacy: The firm encourages all investors who suffered losses in Duolingo stock or options to contact partner Josh Wilson directly, demonstrating a commitment to protecting investor rights.
- Historical Performance Review: Since its founding in 1995, Faruq & Faruqi has recovered hundreds of millions of dollars for investors, showcasing its expertise and successful track record in securities law.
- National Legal Services: With offices in New York, Pennsylvania, California, and Georgia, Faruq & Faruqi provides a wide range of legal services, further enhancing its influence in the securities litigation field.
See More
Duolingo Reports Strong Earnings but Stock Declines
- Significant Revenue Growth: Duolingo's Q4 revenue increased approximately 35% year-over-year to $283 million, marking the first time annual bookings surpassed $1 billion, demonstrating strong performance in user base expansion and profitability.
- Strategic Shift: Management plans to shift focus from short-term profitability to aggressive investment in user growth by 2026, targeting 100 million daily active users by 2028 with an expected growth rate of around 20%.
- Negative Market Reaction: Despite strong results, the market reacted negatively to management's guidance of mid-teens revenue growth (15%-18%) for 2026 and a potential drop in adjusted EBITDA margins to 25%, leading to a decline in stock price.
- Long-Term Growth Potential: Duolingo's strategy to prioritize user growth is seen as logical, as a larger user base enhances future monetization potential, especially in a freemium model, even though it may pressure margins in the short term.
See More
Duolingo Aims for 100 Million Daily Active Users by 2028
- User Growth Target: Duolingo aims to reach 100 million daily active users by 2028; although current user engagement and conversion rates have not shown significant improvement, this goal could enhance the long-term value of its freemium model.
- Strong Financial Performance: In its latest earnings report, Duolingo achieved approximately 35% revenue growth in Q4, with net profit soaring from $14 million to $42 million, indicating the company's potential for revenue expansion.
- Investment Strategy Shift: Despite sacrificing short-term profits, Duolingo is increasing investment in product development, particularly in promoting AI-driven tools, aiming to enhance user engagement and lay the groundwork for future monetization.
- Profitability Model Risks: The company anticipates a slowdown in mid-term revenue growth to 15%-18%, indicating that while expanding its user base, short-term profitability may be impacted, prompting investors to monitor whether this strategy will yield long-term earnings.
See More
Duolingo Prioritizes Long-Term Growth Over Short-Term Profits
- Significant Revenue Growth: Duolingo reported approximately 35% revenue growth in Q4, with net profit soaring 300% from $14 million to $42 million, indicating strong performance in user growth and profitability.
- Strategic Investment Decision: The company has chosen to increase investments in product development and AI tools, aiming for 100 million daily active users by 2028, even if it means sacrificing some short-term profits to strengthen its competitive edge.
- Slower Growth Expectations: Management has guided for mid-teens revenue growth of 15% to 18%, indicating a shift in focus from short-term monetization to expanding the user base for long-term growth.
- Risks and Uncertainties: While the strategy appears sound in theory, if user growth does not accelerate, it could lead to slower revenue expansion and compressed margins, prompting investors to closely monitor the company's ability to convert users into paying subscribers.
See More
Duolingo Stock Plummets, Shifts Focus to User Growth
- Stock Plunge: Duolingo's stock has fallen over 80% from its peak above $500 to around $100, raising concerns about its future despite solid 2025 performance with revenue growth of approximately 39%, annual bookings exceeding $1 billion, and net profit increasing from $89 million to $414 million.
- Slowing User Growth: While the platform boasts over 50 million daily active users, the growth rate has slowed to about 30% in Q4 2025, down from over 40% historically, with management projecting a further decline to 20% in 2026, potentially impacting future revenue expansion.
- Strategic Reset: To reignite user growth, Duolingo is prioritizing user experience in 2026, targeting 100 million daily active users by 2028, even as it lowers bookings growth guidance to 10%-12%, indicating a clear shift towards user acquisition over immediate profitability.
- Utilization of AI Tools: Duolingo is leveraging AI tools to enhance personalized learning experiences, such as the Video Call feature with AI agent Lily, which allows learners to practice speaking in a safe environment, potentially increasing user engagement and driving long-term economic benefits.
See More
Duolingo's User Growth Slowdown Raises Investor Concerns
- User Growth Slowdown: Duolingo's daily active user growth rate has slowed to around 30% in Q4 2025, down from over 40% previously, with management projecting a further decline to about 20% in 2026, which could impact the company's long-term revenue growth.
- Revenue and Profit Performance: Despite the slowdown in user growth, Duolingo achieved a 39% revenue increase in 2025, with annual bookings surpassing $1 billion and net profit rising from $89 million to $414 million, demonstrating the resilience of its core business.
- Strategic Shift: The company plans to prioritize user growth and the free learner experience in 2026, even at the cost of short-term profitability, targeting 100 million daily active users by 2028, indicating a strong focus on future growth.
- Market Risks and Opportunities: Investors must weigh whether Duolingo's core business model can balance user growth and monetization; if execution fails, it could lead to slower revenue expansion and margin compression, affecting long-term economic viability.
See More
Faruqi & Faruqi Investigates Duolingo Investor Losses
- Legal Investigation Launched: Faruq & Faruqi, LLP is investigating potential claims against Duolingo (NASDAQ:DUOL), indicating that the company may face legal liabilities for significant investor losses.
- Investor Rights Advocacy: The firm encourages all investors who suffered losses in Duolingo stock or options to contact partner Josh Wilson directly, demonstrating a commitment to protecting investor rights.
- Historical Performance Review: Since its founding in 1995, Faruq & Faruqi has recovered hundreds of millions of dollars for investors, showcasing its expertise and successful track record in securities law.
- National Legal Services: With offices in New York, Pennsylvania, California, and Georgia, Faruq & Faruqi provides a wide range of legal services, further enhancing its influence in the securities litigation field.
See More
Duolingo Reports Strong Earnings but Stock Declines
- Significant Revenue Growth: Duolingo's Q4 revenue increased approximately 35% year-over-year to $283 million, marking the first time annual bookings surpassed $1 billion, demonstrating strong performance in user base expansion and profitability.
- Strategic Shift: Management plans to shift focus from short-term profitability to aggressive investment in user growth by 2026, targeting 100 million daily active users by 2028 with an expected growth rate of around 20%.
- Negative Market Reaction: Despite strong results, the market reacted negatively to management's guidance of mid-teens revenue growth (15%-18%) for 2026 and a potential drop in adjusted EBITDA margins to 25%, leading to a decline in stock price.
- Long-Term Growth Potential: Duolingo's strategy to prioritize user growth is seen as logical, as a larger user base enhances future monetization potential, especially in a freemium model, even though it may pressure margins in the short term.
See More
Duolingo Aims for 100 Million Daily Active Users by 2028
- User Growth Target: Duolingo aims to reach 100 million daily active users by 2028; although current user engagement and conversion rates have not shown significant improvement, this goal could enhance the long-term value of its freemium model.
- Strong Financial Performance: In its latest earnings report, Duolingo achieved approximately 35% revenue growth in Q4, with net profit soaring from $14 million to $42 million, indicating the company's potential for revenue expansion.
- Investment Strategy Shift: Despite sacrificing short-term profits, Duolingo is increasing investment in product development, particularly in promoting AI-driven tools, aiming to enhance user engagement and lay the groundwork for future monetization.
- Profitability Model Risks: The company anticipates a slowdown in mid-term revenue growth to 15%-18%, indicating that while expanding its user base, short-term profitability may be impacted, prompting investors to monitor whether this strategy will yield long-term earnings.
See More
Duolingo Prioritizes Long-Term Growth Over Short-Term Profits
- Significant Revenue Growth: Duolingo reported approximately 35% revenue growth in Q4, with net profit soaring 300% from $14 million to $42 million, indicating strong performance in user growth and profitability.
- Strategic Investment Decision: The company has chosen to increase investments in product development and AI tools, aiming for 100 million daily active users by 2028, even if it means sacrificing some short-term profits to strengthen its competitive edge.
- Slower Growth Expectations: Management has guided for mid-teens revenue growth of 15% to 18%, indicating a shift in focus from short-term monetization to expanding the user base for long-term growth.
- Risks and Uncertainties: While the strategy appears sound in theory, if user growth does not accelerate, it could lead to slower revenue expansion and compressed margins, prompting investors to closely monitor the company's ability to convert users into paying subscribers.
See More
