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Bumble shares drop as AI revamp fails to reverse paying user decline

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Bumble’s stock tumbled 17% on Thursday after the dating app operator posted another quarterly drop in paying users, raising doubts about its AI-driven turnaround plan and long-term growth outlook.

The company revealed that total paying users fell 8.7% year-on-year to 3.8 million in Q2, despite efforts to enhance match quality and connect users with similar engagement levels and intentions.

In contrast, rival Hinge — owned by Match Group — has been outperforming thanks to its broader international presence and more competitive AI tools, which provide personalized matches and boost engagement. Analysts note that Hinge’s emphasis on authentic profiles and creative prompts has helped sustain stronger user retention rates.

Bumble is still in the early stages of its strategy to improve user experience, introducing AI-powered features to bolster trust and safety. However, analysts warn that the tighter verification measures could slow user and payer growth in the short term.

Citi analysts noted that visibility into future user and payer trends remains low, and that increased marketing and R&D spending could put pressure on margins into 2026.

Shares of the Austin-based company are down over 6% this year, currently trading at 7.96 times projected earnings for the next 12 months, compared with Match Group’s 14.64.

Duolingo Shares Jump 32% on Strong AI-Driven Growth and Upgraded Forecast

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Duolingo shares surged about 32% on Thursday after the language-learning platform raised its annual forecast, boosting investor confidence in its ability to accelerate user growth through AI-powered features, social engagement tools, and improved monetization strategies.

The company has been experimenting with app features and subscription models to enhance retention and attract new users. Duolingo runs targeted experiments to decide which subscription options are shown to which users and when, aiming to maximize long-term value rather than pushing any single plan.

In the second quarter, average revenue per user rose 6%, largely due to more users switching to the higher-priced Max tier, which includes AI-powered video calls for conversational practice, and the $12.99-per-month Super plan. Analysts at Raymond James noted potential upside in monetization, pricing, paid conversion rates, and margins, despite a cautious stance on near-term user growth.

Gross margin fell 100 basis points in the quarter, a smaller decline than the 300 basis points Duolingo had anticipated, thanks to lower AI costs and stronger ad performance. “AI costs that power Max were lower than expected, as the cost of calling AI tools has dropped significantly,” CFO Matt Skarupa told Reuters.

The company posted adjusted earnings per share of 91 cents, beating analyst expectations of 58 cents, prompting an upward revision in earnings forecasts. If current levels hold, Duolingo’s market valuation could increase by roughly $5 billion from its prior $15.62 billion.

Even after the rally, Duolingo trades at a forward price-to-earnings multiple of 85.21 — higher than peers such as Uber (26.54) and DoorDash (79.38).

Shopify Raises Revenue Outlook on Strong Consumer Demand, Shares Jump 20%

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Shopify (SHOP.TO) forecasted upbeat quarterly revenue on Wednesday, citing resilient consumer demand and strong seller performance despite tariff pressures. The Canadian e-commerce platform’s shares surged 20% following the announcement.

Shopify’s merchant base showed steady growth through early August, building on a 31% revenue jump in the April-June quarter. The company’s results helped ease investor concerns over uncertainty caused by shifting U.S. trade policies under President Donald Trump.

“We haven’t seen any drops in U.S. demand, whether inbound, outbound or local. In fact, the U.S. accelerated in the second-quarter,” CFO Jeff Hoffmeister said on the post-earnings call, noting strong growth across all merchant segments. High-volume sellers with more than $50 million in annual gross merchandise volume (GMV), as well as smaller sellers under $2 million, performed particularly well.

Shopify also reported that many merchants have been raising prices, although specific details were not disclosed. This contrasts with e-commerce giant Amazon’s recent statement that it has yet to see a notable rise in prices despite strong retail results.

Analyst Charlie Miner of Third Bridge commented, “The tariff situation is still playing out… but there is clarity on how consumers will react, and Shopify appears largely unaffected so far.”

Looking ahead, Shopify expects third-quarter revenue growth in the mid- to high-twenties percentage range, above analysts’ consensus estimate of 21.54%, based on data from LSEG.

The company’s investments in artificial intelligence-powered tools to help merchants automate tasks such as website building, image generation, and sales data analysis are contributing to its momentum.