We recently compiled a list of the 10 AI News and Ratings Shaking Up Wall Street. In this article, we are going to take a look at where Duolingo, Inc. (NASDAQ:DUOL) stands against the other AI stocks.
Technological innovations in steam power, electricity and microprocessors drove the first industrial revolution. Fast forward, artificial intelligence is the catalyst driving the fourth industrial revolution. That’s because the technology is reshaping industries at a breakneck speed. From revolutionizing the healthcare sector to addressing cybersecurity challenges to reshaping the auto industry, technology is reshaping the way of life in ways not seen before.
According to Markets and Markets, the global AI market is projected to grow at a compound annual growth rate of 35.7% to $1.3 trillion by 2030. Significant advancements in computational power and data availability are the factors expected to accelerate the growth. Similarly, revolutionary technology is giving rise to unique investment opportunities as companies compete against time to develop game-changing innovations and enhance productivity.
The $500 billion Stargate project is one such investment that sums up the enormous sums of money that companies are willing to spend to gain an edge on AI. While most of the investments are going to data centers and other infrastructures, companies are also inking deals and partnerships to secure reliable energy to power AI models and infrastructure.
The companies that provide the metaphorical picks and shovels of artificial intelligence, the manufacturers of semiconductors, servers, networking gear, and power generators—have seen a sharp increase in stock prices as a result of the spending frenzy.
The tremendous opportunity up for grabs is evident due to the blockbuster gains in the equity markets over the past two years. Major US indices are trading near all-time highs. While deep pullbacks have come into play in recent months, Dan Ives at Wedbush Securities remains bullish about the AI-driven rally.
Ives dismissed the recent tech stock sell-off caused by DeepSeek as a “tech AI head fake” and believes that investors have a “golden buying opportunity” with it. Ives claims that the fear surrounding the low-cost, high-performance model of the Chinese AI company is exaggerated and won’t affect the AI revolution’s long-term course.
“This DeepSeek tech-driven sell-off will be historically noteworthy in market history,” Ives wrote, emphasizing that it does not reflect a genuine threat to AI spending trends. “We expect more innovation in AI and LLM model costs to come down… that is ultimately a great thing for computing power, use cases, and where the tech world is going in this 4th Industrial Revolution.”
President Donald Trump has already reiterated that DeepSeek is a “wake-up call” for the U.S. tech industry, insisting the sector should be laser-focused on computing if the US is to maintain its edge on the technology.
In an attempt to keep American businesses from lagging behind their Chinese counterparts, Wall Street thinks DeepSeek’s success will encourage the US government to increase its investment in AI.
“In the near term, DeepSeek’s achievement is likely to pressure the U.S. into increased support for domestic AI development, most likely leading to increased federal investment in AI research and infrastructure,” wrote Mills of Raymond James. The firm added that it could envision the U.S. passing an AI version of the CHIPS and Science Act.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close up macro image of someone using a mobile device to learn a new language.
Duolingo, Inc. (NASDAQ:DUOL)
Number of Hedge Fund Holders: 31
Duolingo, Inc. (NASDAQ:DUOL) is a technology company that operates as a mobile learning platform. It offers courses in 40 different languages, including Spanish, English, French and German. On January 27th, UBS analyst Chris Kuntarich upgraded the stock to a Buy with a $410 price target. The upgrade comes when the company is at the forefront of product innovation in the language learning space while leveraging artificial intelligence.
Although Duolingo, Inc. (NASDAQ:DUOL) has made investments in AI features since 2012, its most recent initiatives have been driven by developments in generative AI. These developments aided in developing the AI-powered features Video Call, Explain My Answer, and Roleplay.AI, which could improve Duolingo’s features and content production skills, resulting in more individualized and successful learning outcomes. An early illustration of how AI can be used to enhance user engagement and learning outcomes is the company’s Video Call feature with Lily.
This feature makes learning more dynamic and immersive by enabling users to have simulated conversations with an AI character named Lily. The launch of Max, a new premium feature, is anticipated to significantly boost bookings in 2025. Max provides users looking for a more intensive language learning experience with cutting-edge learning resources and content.
Overall DUOL ranks 10th on our list of the AI stocks that are shaping up Wall Street. While we acknowledge the growth potential of DUOL as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DUOL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article was originally published at Insider Monkey.
