AI Translation Risks Put Spotlight on Duolingo’s Pricey Multiple

Duolingo Inc. is facing risks from multiple angles as investors reassess the impact of artificial intelligence on the mobile foreign language learning platform.

AI-powered live translation services are seen as a potential threat to its long-term growth, which explains the stock’s volatility last week after Apple Inc. detailed a similar feature to be included with its latest AirPods. At the same time, Duolingo has faced a backlash about its AI-first strategy, with some users criticizing Chief Executive Officer Luis von Ahn for considering replacing human contractors with AI.

The stock soared 660% from the end of 2022 through its ...