Google Translate adds AI language learning features, Duolingo stock unaffected

Investing.com - Google Translate has begun rolling out new AI-powered language learning features in beta, starting with a limited set of languages, according to Raymond James.

The new features, powered by Google’s Gemini model, initially support Spanish and French for English speakers, and English for Spanish, French, and Portuguese speakers, the investment firm noted in its analysis.

Raymond James maintained its Market Perform rating on Duolingo Inc. (NASDAQ:DUOL), stating that while Google’s new features could represent a competitive challenge, Duolingo retains significant advantages in gamified language learning across more languages.

The firm specifically highlighted potential competitive pressures from Google’s ability to provide generative AI features at no cost to users, absorb AI-related expenses, and leverage Google Translate’s position as a default app on many devices.

Despite these developments and recent headlines about OpenAI’s GPT-5 launch, Raymond James does not view these as significant medium-term risks to Duolingo’s product advantage in the language learning market.

In other recent news, Duolingo reported quarterly results that exceeded expectations, with bookings surpassing forecasts by 9% due to foreign exchange benefits, advertising revenue, and strong performance of its Super subscription plans. The company’s EBITDA results also outperformed expectations by 29%, showcasing strong financial performance. In light of these developments, Wolfe Research maintained its Peerperform rating on Duolingo. Additionally, KeyBanc upgraded Duolingo’s stock rating to Overweight, citing product improvements and viewing the recent AI backlash as a temporary issue. Morgan Stanley reiterated its Overweight rating and set a $500 price target, addressing potential competitive threats from OpenAI’s language learning tools. Similarly, JPMorgan increased its price target to $515, highlighting Duolingo’s generative AI innovation and monetization of its Max subscription tier. DA Davidson also reiterated its Buy rating with a $500 target, reflecting confidence in the company’s future revenue and EBITDA multiples. These updates reflect a generally positive outlook from analysts despite emerging challenges in the language learning market.

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