Artisan Mid Cap Fund's Investment in Duolingo (DUOL) Quickly Rewarded

Artisan Partners, an investment management company, released its “Artisan Mid Cap Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund’s Investor Class fund ARTMX returned 14.40%, Advisor Class fund APDMX posted a return of 14.45%, and Institutional Class fund APHMX returned 14.50%, compared to a 18.20% return for the Russell Midcap Growth Index. Global markets experienced a significant but volatile Q2, rotating from double-digit declines to double-digit gains. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Artisan Mid Cap Fund highlighted stocks such as Duolingo, Inc. (NASDAQ:DUOL). Duolingo, Inc. (NASDAQ:DUOL) is a mobile language learning platform that offers courses in 40 different languages. The one-month return of Duolingo, Inc. (NASDAQ:DUOL) was -9.68%, and its shares gained 91.97% of their value over the last 52 weeks. On August 7, 2025, Duolingo, Inc. (NASDAQ:DUOL) stock closed at $343.61 per share, with a market capitalization of $15.619 billion.

Artisan Mid Cap Fund stated the following regarding Duolingo, Inc. (NASDAQ:DUOL) in its second quarter 2025 investor letter:

"During the quarter, we initiated new GardenSM positions in RBC Bearings, BWX Technologies and Duolingo, Inc. (NASDAQ:DUOL). Duolingo is a leading provider of online language learning globally, with strong product design and unit economics. It has differentiated itself with a unique gamified approach while its machine learning algorithms leverage monthly users and daily tracking events to improve and personalize the learning experience. Its app-based platform derives most of its revenues from subscriptions. We see numerous growth catalysts, including rising penetration of its premium Duolingo Max subscription tier (with embedded AI functionality), global expansion of English learning and potential price increases. It has also expanded into new categories, including Duolingo ABC, an early childhood education app. Market volatility gave us a chance to initiate the position, which was quickly rewarded with strong quarterly results, including 38% YoY revenue growth."

Duolingo, Inc. (NASDAQ:DUOL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held Duolingo, Inc. (NASDAQ:DUOL) at the end of the first quarter, which was 52 in the previous quarter. While we acknowledge the potential of Duolingo, Inc. (NASDAQ:DUOL) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Duolingo, Inc. (NASDAQ:DUOL) and shared the list of best multibagger stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.