Dow, S&P 500, Nasdaq sink as valuation concerns mount amid bleak jobs data

Shares in the language-learning app Duolingo (DUOL) plummeted on Thursday, falling more than 25% as an AI-heavy pitch from the company fell flat with investors and the company lowered its guidance on bookings.

Duolingo, which has leaned into pitching itself as an AI-forward company in recent months, posted third quarter sales of $271.1 million against analyst estimates of $260.3 million. But several negative measures dragged shares downward.

The company lowered its bookings forecast for the fourth quarter to a range of $329.5 million to $335.5 million, below analyst estimates of $343.6 million. Meanwhile, Duolingo also missed on estimates on user growth in the third quarter, ticking up to 50.5 million daily active users against analysts’ estimates of 51.1 million users.

The company noted in a third quarter investor letter that its revenues and daily active users are both up more than 40% since the start of the year.

Shares in Duolingo, which had seen explosive growth through May, are down more than 40% on the year as repeated attempts at an AI pitch have fallen flat with investors.

“We are one of the few companies that has found a way to make profit off of AI. This is actually profitable for us,” CEO Luis von Ahn said to Reuters.

Von Ahn wrote in the third quarter investor letter that “we’re investing proportionally more in teaching better … because we want to keep growing users for a long time, and because of our increasing conviction that AI can fundamentally change what’s possible in how we teach.”

The language-learning platform has been on the back foot ever since a ChatGPT-5 presentation by OpenAI displayed the generative AI software building a language-learning tool from scratch in only minutes.