Duolingo upgraded by Evercore ISI as AI features drive user growth

Duolingo is well-positioned for a recovery as it integrates artificial intelligence to attract more users and maintain its leadership in the language learning market, according to Evercore ISI. The research firm upgraded Duolingo’s stock to “outperform” from “in line” and raised its price target to $210 from $105, signaling nearly 42% potential upside from Monday’s closing price.

“Duolingo now commands approximately four times the selection of its closest pure-play competitor,” analyst Mark Mahaney noted in a Monday client memo, citing findings from a recent Evercore ISI survey. “What is particularly significant is that our survey work — tracking both rising satisfaction and rising daily frequency (daily usage climbing from 61% in 2025 to 65% in 2026) — provides proprietary evidence of the positive impact of recent AI-linked product changes.”

Duolingo shares rose more than 5% during Tuesday trading. Despite this gain, the stock has declined more than 10% year-to-date as the company faced challenges sustaining paid subscriber growth while navigating potential AI-related disruption risks.

However, Duolingo has launched several AI-enabled products that are expected to strengthen user acquisition and improve platform monetization, according to Evercore ISI.

“We’ve been particularly focused on the engagement impact of several AI-enabled products Duolingo has shipped this year — spoken tokens, Flashcards, and Speaking Adventures (a free lesson type where learners complete real-world tasks by talking to Duolingo’s characters) — all of which we believe can boost engagement and drive further user growth,” Mahaney wrote.

The analyst also highlighted that Duolingo recently reported a record-high user retention rate of 84%, representing approximately a 1% year-over-year increase.

According to Mahaney, the growing use of generative AI tools among language learners is unlikely to negatively impact Duolingo. ChatGPT users primarily seek language learning for travel purposes, a market segment that Duolingo has historically deprioritized due to limited monetization opportunities.

Evercore ISI’s upgrade contrasts with broader Wall Street sentiment. LSEG data indicates that of the 25 analysts covering Duolingo, 17 currently maintain a hold rating on the stock.

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