Courtesy of Duolingo

Duolingo’s stock is plunging and the company is blaming its slower growth on less “unhinged” posting

The company intends to spend more on educational app technology, structure its product so it’s less focused on extracting payments, and pay more attention to boosting social media engagement.

Matt Phillips

11/6/25 11:27AM

Duolingo plunged in early trading, putting the shares on track for their worst-ever day, after the company posted weaker-than-expected user growth in Wednesday’s Q3 results and simultaneously signaled that it was deprioritizing monetization over the short term in an effort to revive its growth numbers.

Given that “prioritizing monetization” is essentially Wall Street’s unofficial slogan, the stock market tumble is perhaps understandable.

But what does it actually mean? Basically, it means the decisions the company makes in structuring how the app works will be biased toward keeping new users on the app, rather then steering them to pay up to subscribe right now or monetizing their eyeballs through ads. (While those app roadblocks do pull in cash, they also increase the number of people who quit the app out of frustration.)

Why is the company doing this? CEO Luis von Ahn explained on the post-earnings conference call. (We’ve lightly edited it for clarity):

“We see a huge opportunity. Over the next few years, education and the way people learn, they’re going to change fundamentally, and it’s because of AI... We have line of sight now to create an app that can teach really, really well. Much better than anything that humanity has seen before, as good as a human tutor but also more engaging...

We just posted 135 million monthly active users. If we’re able to do an app that teaches much, much better than we have now, we will be talking about billions of users that we have. And that’s what we want to shoot for here. So, this is why we are investing in the long term...

The goal here is — because the opportunity is so large — the goal here is to be growing DAUs fast for a very long time.”

In a statement to Sherwood News, the company reiterated those points:

“The reason we’re taking the long view is because we see an opportunity to grow fast for a long period of time and make an app that can teach better than anything we’ve seen before. The financial impact from this reprioritization is relatively small and we believe it’s worth it in the near term because of the huge opportunity ahead.”

Reinvigorating user growth could be tough, however.

Duolingo intends to redouble its efforts on creating “unhinged” social media marketing content — which often features a stalker-like version of its ubiquitous green owl that’s fixated on getting you to do your language lessons.

Such content was key to the way the company built its user base over the last few years. But the company decided to take a break on it as it dealt with a separate social media backlash on LinkedIn — more below — as Von Ahn explained on the conference call.

“We paused all the unhinged posts in our social media for a bit because we were listening to our community and trying to build brand love. And when we don’t post unhinged things, that basically our posts were much less likely to go viral, and that did have an impact on [daily active user] growth.

The good news is that, over the last few weeks, we have started the unhinged posts again in our social media accounts. And while it hasn’t gotten all the way to the peak where it was, we’ve seen a lot of recovery. So, that’s really starting to show up. And we do expect that to affect [daily active users] positively.”

Judging from the reaction in the shares Thursday, people seem skeptical a stampede of users is on its way.

After all, the company said it was prioritizing user growth in the just-reported Q3, but user growth actually missed Wall Street expectations, arriving at 35.8%, lower than the 40% level Duolingo saw in Q2.

And Wyatt Swanson, an analyst who covers the stock for brokerage firm D.A. Davidson, told us that it’s far from assured that the company will be able to recapture the social media magic that previously made its unhinged posts viral sensations on TikTok and Instagram.

The company decided to pause such posts in the aftermath of a social media backlash to a clunky LinkedIn post laying out the company’s AI strategy. (It implied it would use AI to replace human contractors.)

Since that interruption in content, it seems like Duolingo’s owl is having trouble reclaiming a prominent place in the algorithms, which will make it much tougher to go viral and boost user growth, Swanson said.

“The setup really hasn’t improved that much,” he said of the company’s effort to refocus on growth. “The stock reflects that they’re just in a really weird spot.”

Matt Phillips2h

Intel soars amid retail engagement, analyst chatter

Intel ripped toward a new 52-week high Wednesday, amid a flurry of activity in the options market and a couple of positive analyst assessments ahead of its earnings report due tomorrow.

Shortly after 11 a.m. ET, call options activity was roughly equivalent to the full-day average over the past 10 sessions. Bets on stock swings using call options have become a highly popular retail trade, suggesting that retail investors are getting interested in the shares ahead of the report from the partially nationalized American chip icon.

(That interpretation is buttressed by what we’re seeing on social sentiment-monitoring sites like SwaggyStocks, which at about 11:30 a.m. listed Intel as the fifth-most-mentioned stock on Reddit’s r/WallStreetBets forum over the past 24 hours.)

Wall Street analysts are also chattering about the stock, with RBC and Bernstein Research both writing about it in the last 24 hours.

RBC — which has a “sector perform” (or neutral) rating on Intel — said it expects a “slight beat and largely inline outlook” when the company reports after the close Thursday.

Bernstein’s Intel watchers — who have a “market perform” (also neutral) rating on the stock — seemed a bit more cautious, writing, “Overall numbers going forward still looking high to us. Fundamentals and valuation keep us sidelined.”

“If there is no memory, there’s no AI.”

FLASH FORWARD

ByMattPhillips

WedJan 212026

Matt Phillips5h

BNP upgrades Seagate on more durable cycle

Seagate Technology Holdings was up in early trading after analysts at BNP Paribas upgraded the shares to “outperform” from “neutral” and lifted their price target to $380 a share, implying a gain of almost 15% from where the stock is currently trading.

The maker of the somewhat stodgy technology known as hard disk drives — or HDDs in tech lingo — was one of the top stocks in the S&P 500 for much of last year as it was swept up in the AI data center trade.

Data centers need tons of storage capacity, and demand from hyperscalers has driven up prices and created shortages for disk drives, an industry that is dominated by a duopoly of Seagate and Western Digital. (BNP also maintained its “outperform” rating on WDC in a note Wednesday.)

The analysts at BNP say they pushed by the buy button on the stock after becoming more convinced that the upswing in sales was durable, writing:

“We have witnessed a structural shift happening in HDD industry, toward 1) an effective duopoly, 2) higher mix toward data centers, and 3) disciplined capex investments. These have supported our expectations of long-term, through-cycle profitability for the HDD industry. We are now upgrading Seagate from Neutral to Outperform as we are gaining greater conviction that robust data center storage demand could drive an upcycle longer than we initially expected. We think a secular re-rating of Seagate (as well as Western Digital) to over 20x is justified.”

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Stocks jump as Trump says “I won’t use force” to acquire Greenland

In a speech in Davos, Switzerland, US President Donald Trump said he won’t use force to acquire Greenland, sending stocks higher at the open.

“We probably won't get anything unless I decide to use excessive strength and force, where we would be frankly unstoppable, but I won’t do that,” Trump told the crowd, referring to his pursuit of Greenland, which has roiled markets recently. “People thought I would use force. I don’t have to use force. I don’t want to use force. I won’t use force.”

He seemed to indicate that Denmark, which owns Greenland, could rebuff the US’s overtures to acquire the country without military retaliation.

“They have a choice. You can say yes and we will be very appreciative. Or you can say no and we will remember,” he said. Throughout his speech, Trump constantly reiterated his desire for the US to own Greenland.

Stocks rose at the open, with the S&P 500 rising 0.3%. S&P 500 futures, which had been down Wednesday morning, jumped after his comments.

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J&J slips despite cheery 2026 guidance

Johnson & Johnson reported fourth-quarter sales that beat expectations and gave rosy guidance for 2026.

The company said it expects to bring in between $100 billion and $101 billion in revenue this year, compared to the $98.9 billion analysts polled by FactSet were expecting. The drugmaker also expects to report between $11.43 and $11.63 in annual adjusted earnings per share, compared to the $11.48 that Wall Street was expecting.

Despite beating expectations, J&J, the first major drugmaker to report earnings results this year, fell by more than 2% in premarket trading.