An accountant said he was bullish on Duolingo’s stock — despite its fall — and thought people were making the same “mistake” about it they made with Google.
Business Insider asked Jamie Galvin, cohost of the “Stocks and Savings” Podcast, to share the options he thinks are the most undervalued and overvalued.
Duolingo and Google
Galvin said Duolingo is one stock in his portfolio that he thinks is underrated.
Shares in the language-learning platform fell more than 7% Monday to $285.11 at the closing bell after Apple announced last week that its new AirPods Pro 3 have a live translation function. As of Tuesday’s close, the stock has fallen about 13% since the start of the year.
Despite the decline, Duolingo reported second-quarter results at the start of August above analysts’ and its own estimates. It attributed this to AI-fuelled growth, including launching a game-like experience and video call feature for paid subscribers in September 2024.
Revenues soared 41% year-on-year to $252 million, compared to a Wall Street consensus of $241 million. The company raised its annual outlook for 2025 from between $987 million and $996 million to a range of $1.01 billion and $1.02 billion.
Galvin said investors are wrong to believe AI translation technology may make Duolingo redundant.
“I think people made this mistake about Google 12 months ago,” he said. “People thought AI was coming to kill this company.”
Bill Gates predicted in May 2023 that AI could mean that “you will never go to a search site again,” and last month, Sam Altman said, “I legitimately cannot tell you the last time I did a Google search.”
But on Monday, Google’s parent company, Alphabet, became the fourth company to reach a market cap of $3 trillion after an antitrust ruling didn’t force the company to sell Chrome.
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Galvin said he thought Google and Duolingo were in a similar situation, where AI’s ability to provide real-time translations doesn’t mean people don’t want to still learn languages or use Google Translate.
“It turns out this is a company that can use AI better and become better for it,” he said.
Palantir
Galvin said he doesn’t understand Palantir’s valuation, adding he believed the hype around AI is driving the rise.
The defense tech and software firm has a market cap of about $407 billion. Its shares have risen 125% this year and are up about 370% year-on-year to $170.26.
In August, Palantir traded at 70 times its revenue valuation for 2026.
The company has caught the eye of investors with its Artificial Intelligence Platform, which uses AI to connect consumer data with its customers’ operations.
It’s uncertain how long the “really aggressive investment” in AI chips will last, Galvin said. “That’s what we don’t know, if it’s a bubble or if it’s sustainable, because we just don’t know enough about the industry,” he said.