Why Are Duolingo (DUOL) Shares Soaring Today

What Happened?

Shares of language-learning app Duolingo (NASDAQ:DUOL) jumped 10.4% in the morning session after Morgan Stanley initiated coverage of the stock with a Buy rating, calling the company a "best-in-class consumer internet asset.". The firm also assigned a price target of $435, implying a potential 30% upside.

The shares closed the day at $369.73, up 9.8% from previous close.

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What The Market Is Telling Us

Duolingo’s shares are extremely volatile and have had 34 moves greater than 5% over the last year. But moves this big are rare even for Duolingo and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 1 day ago when the stock gained 6.2% as investor sentiment improved on renewed optimism that the US-China trade conflict might be nearing a resolution. According to reports, Treasury Secretary Scott Bessent reinforced this positive outlook by describing the trade war as "unsustainable," and emphasized that a potential agreement between the two economic powers "was possible." His comments signaled to markets that both sides might be motivated to seek common ground, raising expectations for reduced tariffs and more stability across markets.

Duolingo is up 13.2% since the beginning of the year, but at $369.03 per share, it is still trading 16.4% below its 52-week high of $441.39 from February 2025. Investors who bought $1,000 worth of Duolingo’s shares at the IPO in July 2021 would now be looking at an investment worth $2,655.

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