This Once-Loved Growth Stock Is Down Hard From Its Highs -- Is Duolingo the Best Bargain of 2026?

Language-learning pioneer Duolingo (NASDAQ: DUOL) was a hot ticket a year ago. On May 14, 2025, the stock had tripled in 52 weeks. The green owl could do no wrong.

But that turned out to be Duolingo's all-time peak, followed by a grueling downturn. Amid the rise of so-called vibe coding and the DeepSeek large language model (LLM), Duolingo investors saw new AI-powered threats. At the same time, Duolingo's management said it would prioritize user growth over profits for a while. That sounded scary to many profit-craving investors.

As of April 22, 2026, the stock has lost 80% of its May 2025 value. And if you're a long-term investor, it just might be the best bargain on the market today.

The Babelfish is still fiction, folks

First and foremost, I don't think AI tools will replace language learning anytime soon.

I'm a natural-born Swede who learned English as a second language. Key helpers along the way included The Lord of the Rings, Bruce Springsteen's lyrics, and Swedish subtitles on American TV shows. Still, the English language has been my day job for the last 20 years, and I do translation as a side gig.

So I've done the heavy lifting to become bilingual, and I get paid to deliver natural-sounding language where today's best AI models can't. Sure, Google Translate or DeepL can provide a starting point for human revision, but no doctor, patent lawyer, or serious business would leave its mission-critical translations to AI tools. LLMs like ChatGPT and Claude are even worse. The next time you run across nonsensical instructions in a Temu gadget's manual, you can assume that an AI translation system did most of the damage.

And I sure wouldn't be where I am today if I had to run every thought through Google Translate. The helpful Babelfish of Hitchhiker's Guide to the Galaxy is pure fiction in 2026.

The green owl has AI tricks of its own

In other words, there's still a place for language-learning tools, even if AI platforms are getting better all the time. Moreover, Duolingo is expanding its digital instruction platform to other fields, already including subjects such as math, music, and chess. The recently launched chess course has more than 7 million daily users, even though Duolingo doesn't even show up when you search the mobile app stores for "chess."

At the same time, Duolingo uses AI to explain your mistakes and drive simple conversations in the super-premium Max subscription. Wall Street thinks AI is killing the company, but Duolingo actually benefits from AI systems.

Image source: Getty Images.

Bargain-bin prices for a 40% profit margin? Yes, please.

That hasn't stopped Wall Street from overreacting to the perceived AI threat. You already saw the deep stock price dip. These days, Duolingo trades at just 12.5 times trailing earnings and 13.4 times free cash flows.

Those are bargain-bin ratios, usually reserved for slow-growing and mature business giants or companies on the brink of bankruptcy. Duolingo is neither of those things, sporting a 40% net profit margin while growing revenue by 35% year over year in Q4 2025.

I don't mind picking up Duolingo shares on the cheap while many investors lose sleep over the AI threat.

Anders Bylund has positions in Alphabet and Duolingo. The Motley Fool has positions in and recommends Alphabet and Duolingo. The Motley Fool has a disclosure policy.