Fluent in Gains: Duolingo’s Stock Speaks Wall Street Now
Morgan Stanley sparks a rally in Duolingo stock with a bold buy rating, AI-driven optimism, and a Street-high price target of $435.
Editorial Team (ET)June 11, 2025
Duolingo just got a major stamp of approval from Wall Street — and investors are all ears. The language-learning app’s stock soared over 10% on Wednesday after Morgan Stanley initiated coverage with a bold buy rating and a price target that tops every other on the Street. The analyst behind the move? Nathan Feather. His reasoning? A perfect storm of rapid user growth, surging margins, and real-world gains from generative AI that are already reshaping the company’s trajectory.
This isn’t just another flash-in-the-pan stock pop. It’s a fundamental revaluation of what Duolingo is worth — and more importantly, what it could become. Feather isn’t shy about his bullishness. At a time when many tech companies are still fumbling through how to integrate AI into their platforms, Duolingo is already turning that tech into tangible gains. According to Feather’s note, the company’s Max subscription tier — powered by generative AI — is closing the performance gap between software and human tutors. That’s not a maybe. That’s a measurable shift in how language learning will scale.
Trading at $371.32 in the afternoon session, Duolingo is moving aggressively toward the $435 target Morgan Stanley laid out. That target doesn’t just set a new high—it sets a new tone. Investors are taking notice of how sticky the product has become. The gamified learning experience, paired with AI-driven tutoring and a low churn rate, is proving to be a magnetic combination in an increasingly crowded edtech market.
The numbers are backing it up. Duolingo’s current user base sits at 117 million. That might sound massive, but it represents just 5% of the estimated 2 billion people globally who are trying to learn a new language. According to Feather, that means Duolingo is still in the early innings of its growth story. In fact, even its most mature markets are still growing year over year. That's not just a bullish trend — it’s a clarion call for long-term investors looking for exposure in an underpenetrated global market.
Feather forecasts Duolingo will post a compound annual growth rate of 26% in revenue over the next five years. And that’s not just top-line talk. He sees expanding profit margins tracking alongside that growth, which is music to the ears of investors who’ve been burned by tech stocks with sky-high valuations but thin profits. With Duolingo, there’s a roadmap. There's revenue. There’s retention. And most importantly, there’s upside.
What makes this surge particularly interesting is the clarity of the thesis. There’s no fluff here. Duolingo isn’t promising to pivot to AI — it’s already doing it. Its Max plan isn’t a gimmick. It’s a premium tier that’s been rolled out, tested, and already delivering measurable value. In an era where the phrase “AI-powered” is stamped on just about everything, Duolingo’s use of AI is credible, calculated, and already creating results.
This isn’t the first time Duolingo has caught investor attention, but this is arguably the most substantial fundamental catalyst since its IPO. The stock’s sharp jump Wednesday wasn’t just the result of a price target — it was a re-rating of Duolingo’s potential as a tech company that’s built to last. It’s the kind of move that turns a strong growth story into a must-watch stock.
In a market hungry for durable, scalable, AI-leveraged business models, Duolingo checks all the boxes. It has a massive total addressable market. It has an addictive, gamified platform that users don’t abandon. It has AI already integrated and making a difference. And now, it has the highest price target on Wall Street to back it up.
Investors are listening. And if Morgan Stanley’s right — they’re just getting started.
Conclusion
Duolingo's breakout moment isn’t just a product of hype or a fleeting market rally. It’s being driven by fundamentals, execution, and a strategic embrace of AI that’s already proving transformative. From its stickiness with users to its accelerating growth in even mature regions, Duolingo is showing signs of something rare: staying power. With a fresh buy rating and a Street-high price target, the message is clear — the real Duolingo story might still be ahead of us.
