markets

6/25/25

Duolingo tumbles 6% after analyst shows deceleration in active users

Jefferies analysts published an update on Duolingo Wednesday that showed a marked deceleration in the growth of daily active users, helping the push the stock to its worst day in over two months. The analysts wrote:

“[Daily active user] growth on the mobile app decelerated to +37% y/y in June, a slowdown from +53%/+41%/+40% in Mar/Apr/May. Visits growth on the mobile app also decelerated below the 1Q trajectory, with +30%/+35% growth in April/May (June not yet available) vs. +37% in 1Q.”

The Wednesday slump put a divot in the chart of the online language learning app, which until recently had been up by more than 100% over the last 12 months. (The Nasdaq Composite was up 13% over that period.)

Jefferies analysts suggest that the slowdown in DAU growth could have been tied to CEO Luis von Ahn’s statement earlier this month that Duolingo intended to become an “AI-first” company and would gradually stop using contractors for work that AI could do. The statement was met with online backlash, and von Ahn subsequently tried to clarify his comments, writing:

“I do not see AI as replacing what our employees do (we are in fact continuing to hire at the same speed as before). I see it as a tool to accelerate what we do, at the same or better level of quality.”

That’s essentially what von Ahn told Sherwood News last September when he sat down for one of our Final Boss interviews, just as the shares were really beginning to lift off.

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markets

7h

Opendoor soars as co-founders Keith Rabois and Eric Wu added to board of directors, Shopify COO Kaz Nejatian appointed as new CEO

Opendoor Technologies is soaring after announcing that two of the online real estate company’s co-founders, Keith Rabois and Eric Wu, have been added to its board of directors. Rabois will serve as Chairman.

The company said Wu and Rabois’ VC firm are buying $40 million in Opendoor stock via a private investment in public equity (PIPE) financing.

In addition, Opendoor has poached Shopify COO Kaz Nejatian to serve as its new CEO after Carrie Wheeler resigned in mid-August.

“Literally there was only one choice for the job: Kaz. I am thrilled that he will be serving as CEO of Opendoor,” said Rabois.

The company touted that it’s “going into founder mode” with these additions in its press release, with lead independent director Eric Feder championing this injection of “founder DNA.”

That exact phrase, “founder DNA,” was used by Eric Jackson, architect of the initial rally and social interest in Opendoor, as he openly campaigned for these very two individuals to be added to the board.

This underscores how far the company is willing to go in embracing a new strategy of listening to its investors (particularly the most prominent one, it seems!) as management aims to engineer a fundamental turnaround in its business to match the optimism embedded in its stock price.

Nia Warfield, Luke Kawa

Three stocks power S&P 500 to fresh record closing high

Eighty-three basis points of today’s return in the SPDR S&P 500 ETF, more than 2x its daily gain, were attributable to Oracle and the two leading US chip designers, Nvidia and Broadcom.

Bull horns

Oracle’s RPO Remaining Performance Obligations

What is an RPO, the number that drove Oracle’s giant share move?

Matt Phillips, Max Knoblauch10h

markets

11h

“Pokemon” trading cards skyrocketing in value and GameStop’s collectibles business taking off are two sides of the same coin

The Wall Street Journal’s fantastic piece “The Hot Investment With a 3,000% Return? Pokémon Cards” includes this vignette:

“...the cards caught fire among amateur investors during the pandemic. As some investors banded together to spark the GameStop meme stock mania, a more fringe group of traders, also stuck at home and armed with cash from government stimulus, began scooping up Pokémon cards.”

And the connection between “Pokemon” cards and the video game retailer is in fact even closer than that:

GameStop’s collectibles business played a big role in why it smashed Q2 revenue expectations! Sales in this segment exceeded $227 million, while the two analysts that provided forecasts had an average estimate of $170.4 million. Fiscal year to date, sales of collectibles make up 25.8% of its revenues, up from 16.4% at this time last year.

The company significantly expanded its footprint in the “Pokemon” trading card world in 2024 by launching in-store buying and selling of individual cards, and introduced “Power Packs,” which include one card graded at 8 or above by the Professional Sports Authenticator, in its most recent quarter.

As a 35-year-old man who still plays “Pokemon” (Nuzlockes are peak math + strategy entertainment!), thinks the release of “Pokemon Go” marked the peak for Western civilization, and considers Christmas 1998 to be the second-best day of his life because it’s when he got “Pokemon Red,” I personally view the outperformance of “Pokemon” cards as being indicative of the power of nostalgia coupled with a drop-off in child rearing by millennials, leaving more room for discretionary purchases and investments.

And the nostalgia business seems like a great place to be.

The Hot Investment With a 3,000% Return? Pokémon Cards

The Hot Investment With a 3,000% Return? Pokémon Cards

“...the cards caught fire among amateur investors during the pandemic. As some investors banded together to spark the GameStop meme stock mania, a more fringe group of traders, also stuck at home and armed with cash from government stimulus, began scooping up Pokémon cards.”

And the connection between “Pokemon” cards and the video game retailer is in fact even closer than that:

GameStop’s collectibles business played a big role in why it smashed Q2 revenue expectations! Sales in this segment exceeded $227 million, while the two analysts that provided forecasts had an average estimate of $170.4 million. Fiscal year to date, sales of collectibles make up 25.8% of its revenues, up from 16.4% at this time last year.

The company significantly expanded its footprint in the “Pokemon” trading card world in 2024 by launching in-store buying and selling of individual cards, and introduced “Power Packs,” which include one card graded at 8 or above by the Professional Sports Authenticator, in its most recent quarter.

As a 35-year-old man who still plays “Pokemon” (Nuzlockes are peak math + strategy entertainment!), thinks the release of “Pokemon Go” marked the peak for Western civilization, and considers Christmas 1998 to be the second-best day of his life because it’s when he got “Pokemon Red,” I personally view the outperformance of “Pokemon” cards as being indicative of the power of nostalgia coupled with a drop-off in child rearing by millennials, leaving more room for discretionary purchases and investments.

And the nostalgia business seems like a great place to be.

markets

12h

Oracle’s hyperscaler competitors lag after the cloud computing giant’s blowout revenue forecast

Oracle’s forecast for mind-blowing revenue growth through its fiscal 2030 is lifting most AI-adjacent stocks today.

However, the ones being left behind in this rising tide, falling or lagging well behind Morgan Stanley’s basket of AI tech beneficiaries (up 5.8% as of 12:22 p.m. ET), are its fellow hyperscalers.

Microsoft and Alphabet, which also have massive cloud divisions, are positive — but only just. Amazon, whose cloud revenue growth was deemed a disappointment relative to peers this quarter, is down 2.8%. Meta is down 1.2%.

This suggests, at the very least, that traders aren’t mapping Oracle’s outlook for Nvidia-like revenue growth onto the other major cloud players or one of their biggest customers.

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