I read this more like personal sentiment than a case built on measurable drivers. Here’s why I disagree with several points:
Point 3: In practice, whether the product is “optional” doesn’t change the key fact — the user base is growing. If usage and DAUs keep expanding, the “optional” framing isn’t evidence of weakness by itself.
Point 4: Mechanically, Duolingo’s stickiness is exactly the point. Streaks (and friend streaks) create daily behavior, which means many users still open the app for 1–5 minutes a day. Even without Super, that daily habit can produce recurring ad revenue — essentially a passive monetization layer driven by repetition.
Point 5: Market moves are usually about expectations, not “the business broke.” The decline makes more sense as a reaction to (1) portfolio rotation/positioning and (2) Duolingo signaling a stronger focus on product/quality over near-term revenue/margins — a tradeoff some investors don’t like.
Point 6: The AI fear is understandable, but “AI will replace Duolingo” is not a proven outcome. So far, AI hasn’t clearly displaced Duolingo’s habit + gamification + curriculum advantages. Also, Duolingo is adopting AI to improve the product, not ignoring it — which shifts the story from “AI vs Duolingo” to “Duolingo using AI.”
All fair points but I am going to have to agree with FJ here. There are thousands of stocks to buy, some will be consumer businesses that go viral and the shares will moon. Others will languish or go sideways. Why not sift through to find those with the kinds of moats and downside protection FJ is referencing as opposed to being in the consumer trend picking business? Duolingo is a great business today with a fairly priced stock, but how long will this ride last? How likely is it to be disrupted? In the app business there are no barriers to entry and one of the very few proven use cases of much-over-hyped-LLMs are in translation. Are we in a world where language learning is a growing market or a shrinking ice cube given real-time translation apps? I'll take the later and pass on Duoling for now.
Appreciate the reply. I’m not saying Duolingo is a must own — only that “no moat + shrinking market” isn’t proven.
In consumer apps, moats are often habit + brand + distribution + retention. Building an app is easy; building Duolingo-level engagement, content quality, and monetization at scale is the hard part.
I also get the “thousands of stocks” angle, but that’s more an investing style preference than a direct argument against Duolingo specifically.
And real-time translation isn’t the same as language proficiency — many people learn languages for work, education/tests, immigration, and real conversations, not just to translate menus.
I’m open to the “shrinking market” thesis though — do you have data showing language-learning demand is declining, or is that mainly an assumption based on translation tools?
My main point is that the article makes several strong claims without enough data/refs to support them.
Once we have definitive data it will be too late, the stock will already have price-adjusted. I'm just looking at what competing technologies or use cases can do today and forming a thesis.
Fair — but without those indicators rolling over, it’s still an assumption. Let’s watch retention, conversion, and pricing power; if they weaken, your thesis is playing out. Until then, there isn’t enough data to conclude the market is shrinking or that disruption is imminent.
Either way, thanks for the discussion — not meant to be offensive. Always good to see how others think about the risk/reward and willing to discuss.
Exackly
I read this more like personal sentiment than a case built on measurable drivers. Here’s why I disagree with several points:
Point 3: In practice, whether the product is “optional” doesn’t change the key fact — the user base is growing. If usage and DAUs keep expanding, the “optional” framing isn’t evidence of weakness by itself.
Point 4: Mechanically, Duolingo’s stickiness is exactly the point. Streaks (and friend streaks) create daily behavior, which means many users still open the app for 1–5 minutes a day. Even without Super, that daily habit can produce recurring ad revenue — essentially a passive monetization layer driven by repetition.
Point 5: Market moves are usually about expectations, not “the business broke.” The decline makes more sense as a reaction to (1) portfolio rotation/positioning and (2) Duolingo signaling a stronger focus on product/quality over near-term revenue/margins — a tradeoff some investors don’t like.
Point 6: The AI fear is understandable, but “AI will replace Duolingo” is not a proven outcome. So far, AI hasn’t clearly displaced Duolingo’s habit + gamification + curriculum advantages. Also, Duolingo is adopting AI to improve the product, not ignoring it — which shifts the story from “AI vs Duolingo” to “Duolingo using AI.”
Thanks for sharing your thoughts!
All fair points but I am going to have to agree with FJ here. There are thousands of stocks to buy, some will be consumer businesses that go viral and the shares will moon. Others will languish or go sideways. Why not sift through to find those with the kinds of moats and downside protection FJ is referencing as opposed to being in the consumer trend picking business? Duolingo is a great business today with a fairly priced stock, but how long will this ride last? How likely is it to be disrupted? In the app business there are no barriers to entry and one of the very few proven use cases of much-over-hyped-LLMs are in translation. Are we in a world where language learning is a growing market or a shrinking ice cube given real-time translation apps? I'll take the later and pass on Duoling for now.
Appreciate the reply. I’m not saying Duolingo is a must own — only that “no moat + shrinking market” isn’t proven.
In consumer apps, moats are often habit + brand + distribution + retention. Building an app is easy; building Duolingo-level engagement, content quality, and monetization at scale is the hard part.
I also get the “thousands of stocks” angle, but that’s more an investing style preference than a direct argument against Duolingo specifically.
And real-time translation isn’t the same as language proficiency — many people learn languages for work, education/tests, immigration, and real conversations, not just to translate menus.
I’m open to the “shrinking market” thesis though — do you have data showing language-learning demand is declining, or is that mainly an assumption based on translation tools?
My main point is that the article makes several strong claims without enough data/refs to support them.
Once we have definitive data it will be too late, the stock will already have price-adjusted. I'm just looking at what competing technologies or use cases can do today and forming a thesis.
Thanks for your comment.
Fair — but without those indicators rolling over, it’s still an assumption. Let’s watch retention, conversion, and pricing power; if they weaken, your thesis is playing out. Until then, there isn’t enough data to conclude the market is shrinking or that disruption is imminent.
Either way, thanks for the discussion — not meant to be offensive. Always good to see how others think about the risk/reward and willing to discuss.
Great discussion!
Would you buy adobe?