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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).

EPAM Systems Raises 2025 Revenue and Profit Forecasts on Strong AI-Driven Demand

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EPAM Systems boosted its annual revenue and profit outlook on Thursday, driven by robust demand for its software services as companies continue heavy investments in artificial intelligence technologies. The company also exceeded second-quarter earnings expectations, pushing its shares up over 5% in premarket trading.

The software provider, known for its consulting, cloud, AI transformation, and engineering services, reported broad-based revenue growth across key industry sectors including financial services, healthcare, software, and consumer goods, as well as across global regions.

“As our clients prioritize their AI-readiness and preparatory actions, they are increasingly turning to us to build out their data and AI foundation,” said Chief Revenue Officer Balazs Fejes, who is set to become CEO in September.

EPAM now projects 2025 annual revenue growth between 13% and 15%, revised upward from a previous range of 11.5% to 14.5%. Analysts had expected 13.4%, according to LSEG data. The company also raised its adjusted earnings per share forecast to between $10.96 and $11.12, surpassing the prior guidance of $10.70 to $10.95 and analysts’ estimate of $10.85.

For the third quarter, EPAM anticipates revenue of $1.37 billion to $1.38 billion and adjusted earnings per share between $2.98 and $3.06, both above market expectations.

In Q2, the company posted revenue of $1.35 billion, an 18% increase year-over-year that beat estimates of $1.33 billion. Adjusted earnings per share of $2.77 also surpassed the forecast of $2.61.

Oracle Boosts Annual Revenue Forecast Amid Strong Cloud Demand, Shares Surge

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Oracle raised its annual revenue growth forecast on Wednesday, driven by strong demand for its cloud services, particularly as businesses ramp up AI deployments. The company now expects fiscal 2026 revenue to reach at least $67 billion, up from its previous projection.

CEO Safra Catz revealed on a post-earnings call that Oracle anticipates its total cloud growth — including applications and infrastructure — to jump from 24% in fiscal 2025 to over 40% in fiscal 2026.

Oracle’s growth momentum is mainly fueled by its Oracle Cloud Infrastructure (OCI) platform and its support for AI workloads. Industry experts note that Oracle’s multi-cloud strategy and deep integration with enterprise applications have made OCI a critical component for many customers’ data needs.

Rebecca Wettemann, CEO of analyst firm Valoir, highlighted Oracle’s ability to embed generative AI capabilities into its cloud application suite without additional costs as a key factor reducing adoption barriers and encouraging experimentation.

For the quarter ending May 31, Oracle reported revenue of $15.90 billion, surpassing analysts’ expectations of $15.59 billion. The cloud services and license support segment, Oracle’s largest, posted $11.70 billion in revenue, up 14% year-over-year.

Adjusted earnings per share were $1.70, beating estimates of $1.64.