Investors Are Confused

Welcome back everyone. Today on the Joseph Carlson show, we have a lot of earnings reports. Both companies,

earnings reports. Both companies, massive ones that just reported earnings and one's reporting earnings today. For

example, we just had Nvidia. They

reported earnings and the stock is down around 4 and a.5% despite beating on their numbers. Jensen has gone on TV to

their numbers. Jensen has gone on TV to say investors have it wrong when it comes to selling off companies like Salesforce and Service Now. We'll be

looking at his comments. Salesforce is

one of the companies that just reported earnings. It was a bit of a mixed bag.

earnings. It was a bit of a mixed bag.

They are growing faster this past quarter, but their guidance was a little bit underwhelming. We'll be looking at

bit underwhelming. We'll be looking at some of the numbers trying to make sense of Salesforce. Then we have Marcato

of Salesforce. Then we have Marcato Libre, which fell around 10% after reporting earnings. And this is

reporting earnings. And this is interesting because this is one of the fastest growing companies in the world.

Why is the stock continuing to fall even though the growth is incredible? We'll

be discussing. We also have in it, which is reporting earnings today aftermarket close. It's up 6% on the day. This is a

close. It's up 6% on the day. This is a large holding of mine. And we have Dualingo, another stock that's trading up into earnings, up 6% on the day, reporting earnings after close today.

I'll be giving you my assumptions on both into it and Duelingo today. So, we

have a ton to get to in this episode, a lot to go over, and if you haven't tried it out, check out qual.com. It gives you access to exclusive episodes. We have

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questions. We have deep dives on companies like Meta or Mastercard, hourlong videos of me going into those companies, and of course, you get access to the entire qualum.com platform, which allows you to look up any company and

learn all about it with lots of visuals.

So, try it out now risk-f free at qual.com. So, we've already had a busy

qual.com. So, we've already had a busy week with earnings, and it's about to get even busier. When I look at my portfolio, I just want to give a quick update of what's gone on. Now, this

channel is about transparency, meaning that I don't just share my investment ideas and tell you uh what I think are good stocks, but I also invest directly in them. This is my brokerage. It's real

in them. This is my brokerage. It's real

money, real investments. And I want to tell you what has gone on this year.

After having a great 2025, making a ton of money last year, this year has been brutal. It's been just the opposite,

brutal. It's been just the opposite, which is what happens in the stock market. Stocks don't go up in straight

market. Stocks don't go up in straight lines. But in this case, I I see it

lines. But in this case, I I see it every single day. If we look at how my portfolios traded year to date, it went down around $100,000. That's where it got about the lowest. It went down

between the two portfolios around $100,000. So, it wiped away a lot of the

$100,000. So, it wiped away a lot of the gains. And then in just the past week,

gains. And then in just the past week, we brought it back around $20,000. So,

we went down $100,000, now we're down around $80,000 in a single week. Now,

$80,000 is a lot, but keep in mind, one week was $20,000. That shows how fast things change. For example, when I look

things change. For example, when I look at a lot of the companies, the ones that have been trading down the most, for example, if we look at the financial category, the companies that have really

dropped off like Mastercard, S&P Global, Moody's, and into it are having a big resurgence over the past week. S&P

Global is up like 10%, Moody's is up a lot. Mastercard has traded down and it's

lot. Mastercard has traded down and it's coming back up a little bit. Then we

have into it that's up 6% today. All of

these stocks moving back up a lot in a short amount of time. That's where you get a lot of gains. Meta stayed around the same. So, that one is around $10,000

the same. So, that one is around $10,000 in the red. It's a brand new position.

I've been buying it as it's been trading down. I'm still very bullish on Meta.

down. I'm still very bullish on Meta.

Nothing has changed my opinion on that one. But then we also have ASML and

one. But then we also have ASML and Google. Now, ASML and Google have been

Google. Now, ASML and Google have been the two standouts. These are the ones that have held their own this year.

Investors are constantly doing this rebalancing act, repricing stocks, shifting money from some companies into others. It can be really mind-boggling

others. It can be really mind-boggling how these companies trade. When I look at the consumer category, I have Costco, which of course has just done incredible. If I look at Costco just

incredible. If I look at Costco just year to date this year, it's up $11,000 15%. Costco is one of those companies

15%. Costco is one of those companies that come rain or shine, it'll always have good fundamental performance. In

the restaurant category, I have one holding here. We have Texas Roadhouse.

holding here. We have Texas Roadhouse.

Now, you'll notice that my total position is around the same size as my gains on the stock. That's because what happened with this one is it essentially doubled in price and then I took all the

gains off the table. So, right now with Texas Roadhouse, I'm playing with the house's money. I I just have invested in

house's money. I I just have invested in my gains on the stock and I plan on holding this company for a long period of time. When I switch over to the story

of time. When I switch over to the story fund, it shared a similar picture. We

went into this year with a lot of gains from last year and then very shortly after the stocks came plummeting down.

So lots of the gains wiped away. At one

point we were up around $170,000.

Every single one of these holdings is in the green over the past week. Amazon is

slightly in the green. Netflix is up a lot in the past week around 10% and it's still undervalued. Then we have

still undervalued. Then we have Dualingo. They're reporting earnings

Dualingo. They're reporting earnings today and I'll be going over more of this one later. Now, as we get into the earnings report, we'll kick things off with Nvidia, the biggest, most meaningful one here by far. We have here

the Qualrum brief saying that Nvidia had a blowout earnings beat. Nvidia reported

record Q4 financial year 2026 revenue of 68.1 billion, up 73% year-over-year, and the non-GAAP earnings per share of $162,

both topping consensus estimates, driven by 62.3 billion in data center revenue.

75% year-over-year, 91% of sales, and the company's guiding Q1 of 2027 revenue of 78 billion, implying continued rapid growth even while assuming no data

center compute revenue from China and highlighted full year 2026 revenue at 215.9 billion, up 65%.

These numbers are out of this world.

They're they're incredible numbers. They

just reported 73% revenue growth and they're projecting for the full year 65% year-over-year revenue growth. Let's

take a look at what this looks like. We

have a revenue chart here. This shows

the growth of Nvidia over time since Q1 of 2023. And you can see that that dark

of 2023. And you can see that that dark green data center bar, the main part of the company, that has grown as a percentage of Nvidia's revenue over time. They're a data center company at

time. They're a data center company at least with 91% of the revenues. This is

on a trailing basis $215 billion in revenue and it's high margin revenue. We

see the free cash flow here. And just

take a look at that. If we zoom into the past 10 years, this is what it looks like. Last quarter on a trailing

like. Last quarter on a trailing 12-month basis, we're now up to 96 billion in free cash flow in a trailing 12 months. Now, if we look at the

12 months. Now, if we look at the stockbased comp, it's also not that much. So, Nvidia is producing cash

much. So, Nvidia is producing cash handover fist. They have almost no

handover fist. They have almost no dilution. This is about as as good as it

dilution. This is about as as good as it gets. If we look at just the the most

gets. If we look at just the the most recent quarter, they just reported $34.9 billion in free cash flow. There's no

other companies doing this. Now, you may be asking, why is Nvidia down 4% on the day after these blowout earnings after posting the most incredible cash flows I've ever seen for any stock ever? I

mean, this really is one of a kind.

Nvidia is doing something that no other company has. But if we look at the stock

company has. But if we look at the stock price performance year-to- date, it's in the red. So, even a company as good as

the red. So, even a company as good as Nvidia is in the red. Nvidia, of course, has gone up a lot in the past, so maybe the stock is just taking a breather, but it doesn't seem like it's getting a lot of credit recently for its outstanding

performance. I think if there is one

performance. I think if there is one word to define what's going on today, it would be confusion. I believe investors are just confused. They don't know what

to make of any of this. Claude and all these plugins, the SAS apocalypse, all these articles floating online, the incredible performance from Nvidia, the circular financing. It's a point where

circular financing. It's a point where there's so many confusing and contradictory things going on at the same time that I believe that investors are very confused right now and we see

that going on in the numbers and how these companies are trading. We have

from the Wall Street Journal that the growing capabilities of AI tools from companies such as Google, OpenAI, and Anthropic have convinced investors that industries like software are in mortal

danger while simultaneously driving strong interest in companies serving certain bottlenecks in buildout of data centers. But most other tech names have

centers. But most other tech names have been under pressure. Fears of AI disruption that have pummeled software stocks have also weighed on the tech giants investing heavily in AI

buildouts. Microsoft is down 17% this

buildouts. Microsoft is down 17% this year while Amazon has fallen by 10%.

Investors are even reacting to the works of fiction. A post from a finance blog

of fiction. A post from a finance blog called Citrony was framed as a research memo from the future and laid out a dystopian view of the effects of AI. Now

that's shots fired by the Wall Street Journal. And I love it because that's

Journal. And I love it because that's exactly what this was. investors are

quite literally being they're being frightened by works of fiction. And this

post was framed as a a memo from the future causing enormous sell-offs in all the companies mentioned in the article.

Now, of course, in my most recent episode, I went through and I I tore a lot of that to shreds. I hope you watched it. But this is the type of

watched it. But this is the type of thing going on right now. There's

massive amounts of confusion today in the stock market. Confusion that I haven't seen before. We've gone through some confusing time periods like COVID, uh, the the tariff selloff and many

other things in between, but this has to top them all. Investors have never been more confused of what to make of Aentic technology and AI. That Citroen post, again, a work of fiction, went viral

over the weekend and sparked a sharp sell-off on Monday. That is the vibe that even Nvidia can't fully counter.

The numbers be damned. In fact, the company's runaway success could even be seen as a sign of a destabilizing destabilization to come. Given the

massive amounts of capital spending that are filling the coffers while financially weakening the world's largest companies and employers, Alphabet, Microsoft, Amazon, and Meta

are all expected to see notable declines in free cash flow this year with Amazon expected to tip into the negative territory according to consensus estimates from Visible Alpha. Basically,

there's a big transfer going on, a big exchange. All the free cash flow from

exchange. All the free cash flow from those companies, Meta, Microsoft, Amazon, and Google, it's going from all those companies. Their free cash flows

those companies. Their free cash flows are going down, and it's all going to Nvidia. And investors don't love that

Nvidia. And investors don't love that dynamic. They don't think it's

dynamic. They don't think it's sustainable. Nvidia is now in the odd

sustainable. Nvidia is now in the odd position of having to play elder statesmen, if only to temper some of the wilder views about AI. For instance,

Nvidia chief executive Jensen told conference told a conference earlier this month that the idea that AI will replace software is quote the most illogical thing in the world. Jensen has

had to repeatedly try to temper this market and the imagination of investors, this dystopian future. He's basically

having to counteract and rebut a lot of the claims of fictional works like Citrony have done over the past couple of months. There have been so many of

of months. There have been so many of them that has caused this hysteria in the market. We have another interview

the market. We have another interview here of Jensen going on to CNBC and answering some of these questions about the SAS apocalypse. Here's his take on it.

>> I think so. I think the market's got it wrong. I think it's very likely that

wrong. I think it's very likely that these companies that we're talking about are going to introduce agents that run on their platforms. You know, these

agents, of course, u they have to be experts in what they do, and nobody's going to understand customer service better than Service Now, and they're going to come up with agents that are really fine-tuned and optimized for the

type of work that uses the tools that they have. In the end, also um we need

they have. In the end, also um we need the tools to finish their work and put the information back in a way that we can understand.

>> And that we call them system of records.

And so each one of these tools have their own system of records. the those

system of records exist because we put them there and we use it so that we understand the information that's finally complete and so those system of records will still be ground truth and

uh they'll continue to be ground truth and now the agents will you know help they will use it and they will populate the system of records they will use the tools that are available on these platform I think a thought experiment

that that could be helpful is imagine one of these days when we have robots and these robots are in our homes It's very unlikely that the robot will come up with a new quez an art. The

robot will just read the manual for the quezin art and just use the quezin art.

It's more likely that instead of coming up with another way of doing microwaving that the robot will just use the microwave. These tools exist for a good

microwave. These tools exist for a good reason. And so I'm I'm fairly certain

reason. And so I'm I'm fairly certain future robots will use screwdrivers and wrenches and you know pliers and things like that. and and these tools are

like that. and and these tools are essentially in their digital form from the companies that you're talking about.

>> I think the analogy that he gives there is a good one. He's basically saying that Service Now, Adobe, Salesforce, these type of SAS companies are basically like microwaves, stoves, fridges, or what have you. There all

these different tools to cook food and do things in your house. And if you bring a robot in, which is the agent, the agent's going to use all these tools. It's not going to subjugate them

tools. It's not going to subjugate them and it's not going to replace them. It's

not going to build a different microwave. You're still going to need

microwave. You're still going to need sales horses. You're still going to need

sales horses. You're still going to need service nows. And he also says, which I

service nows. And he also says, which I agree with, that you're going to need this data in a way that humans can understand. If agents are flying around

understand. If agents are flying around doing things, interacting with customers, if they have automatic responses, that's great. will need that technology, but we need some way that humans can review it, that we have a record of it, that we have a user

interface, that we can see what's going on, that we can manage and manipulate the agents and tell them what to do and fine-tune them. That's going to be the

fine-tune them. That's going to be the companies like Service Now and Salesforce. So, his thought experiment

Salesforce. So, his thought experiment here, I think, is accurate. I don't

think Jensen is trying to incorrectly protect these companies. I think he's giving his honest thought here. With

what I see with Nvidia's stock and the way that it's performing, I think it's a matter of time until this thing moves up more. I I think Nvidia is going higher

more. I I think Nvidia is going higher from here. It's a company that I I don't

from here. It's a company that I I don't have in my portfolio. I've never

invested in Nvidia. It's just been one that I've always put to the side and I've invested in the hyperscalers. When

I look at Nvidia, the company right now trades at a 23 Ford PE. It trades with a 2% free cash flow yield. None of this is extravagant. They have very little

extravagant. They have very little stockbased comp and they're growing their free cash flow exponentially. The

rate of growth is incredible. So, I

believe that investors are concerned today. If I was in Nvidia, I would feel

today. If I was in Nvidia, I would feel very good about this report. Salesforce

also just reported earnings. The

company's up around 3% after hours.

Originally, it traded down. Now, it's up a little bit. It's still under the $200 per share mark, though. Mark Beni off, I feel like, is doing everything he can.

He's talking about all these metrics, talking about how they're becoming the enterprise agentic uh layer, basically where enterprises will build all of their agents on top of. They want to

have that be Salesforce. So, he's trying to consolidate demand of any type of agent. And investors aren't buying this

agent. And investors aren't buying this future. Many of them do not believe that

future. Many of them do not believe that this is going to be the case. They still

view agents as being a headwind more than a tailwind. This is the real picture that investors are looking at.

They're looking at how revenue growth overall is slowing. It went from the 30s range down to the mid20s. Down in 2022 is where it decelerated the most. That's

where the stock price really dropped. We

had it go from 26 down to 11%. It went

down as low as 7% and now it's climbing back up. The last quarter was 12.1%.

back up. The last quarter was 12.1%.

They're guiding for around 8% next quarter, 10 to 12% over the next year.

So overall, we're going to be in this range from around 10 to 12% for the full year. When I look at Salesforce, another

year. When I look at Salesforce, another chart I think that is a lot more flattering to the company shows the revenue growth and the operating margins. While it's true that revenue

margins. While it's true that revenue growth has slowed down, at the same time the operating margins have surged upwards from in 2022, basically being non-existent. The operating margins were

non-existent. The operating margins were basically flat. Now they're upwards of

basically flat. Now they're upwards of 20 plus%. So Mark Benoff is doing a good

20 plus%. So Mark Benoff is doing a good job making the company more efficient, making the operating margins go up. I

felt that Salesforce's report's fine. I

still believe that the company's undervalued. Part of the reason that I

undervalued. Part of the reason that I sold the stock off weeks ago is simply because I think that Meta is a better deal. That's the honest reason. I don't

deal. That's the honest reason. I don't

think that Salesforce is going to be destroyed by AI. I haven't thought that before. I don't think it today. Even

before. I don't think it today. Even

putting aside the concerns of agents, the concerns of AI, I simply believe that overall Meta is just a better, more attractive value proposition. Meta's

trading around the same price on a Ford PE, but it's growing around four times as fast on an organic basis.

Salesforce's report was fine. The stock

is undervalued. It's going to take some time for this confusion to pass. Now,

next we have another stock that has caught a lot of attention specifically for its topline growth. Now, there are companies that grow fast and then there's Marcato Libre. This company, it

brings fast growth to a whole new level.

It's like nothing we've possibly ever seen before. I even think all throughout

seen before. I even think all throughout history. For example, when we look at

history. For example, when we look at the overall revenue growth, this is what it looks like. This is on a quarterby basis. So we have one year kagger of 44%

basis. So we have one year kagger of 44% 2 year of 43% 5 year of 45% 10 year of 47%. Marcato Libre is growing incredibly

47%. Marcato Libre is growing incredibly fast. This is like long-term Nvidia

fast. This is like long-term Nvidia level growth. So that catches some

level growth. So that catches some attention. Anytime you see a chart that

attention. Anytime you see a chart that looks like this, it's going to raise some eyebrows. And of course there's the

some eyebrows. And of course there's the question of what do margins look like?

What does it scale to? What are the earnings per share? When we look at Marcato Libre, they just reported earnings and the stock dropped around 10 to 14%. So, we look at the summary here.

to 14%. So, we look at the summary here.

Marcato shares hit a new 52- week low, falling 9 to 14% intraday. And the

reason why was they missed on their consensus earnings per share estimates.

So even though they beat on their revenue, they beat expectations because they fell short on their net income and their earnings per share, the analysts are highlighting margin compression from

heavier investments in AI logistics and Marcato Pago. So they're investing a lot

Marcato Pago. So they're investing a lot in the business that's bringing the net income down. Even though they're growing

income down. Even though they're growing topline like crazy, the stock has traded down. Now, one thing I'll mention when

down. Now, one thing I'll mention when we look at Marcato Libre, uh we look at the valuation of it and it seems like it's in the higher end based on the PE ratio. is trading at a 31. So that

ratio. is trading at a 31. So that

doesn't seem overly expensive, but it's a premium category. These are the categories of stocks trading where they they grow revenue above 20% per year.

Marcato Libre is way above that level.

So it's trading with a 30 plus PE ratio.

You have the other part here which is a free cash flow yield. At first glance, this looks incredibly high, almost suspiciously high. Why is the free cash

suspiciously high. Why is the free cash flow yield at 11%. Why would a stock growing this fast trade with this type of yield? Well, the truth is this

of yield? Well, the truth is this doesn't really share the full picture because Marcato Libre has a lot of float from their fintech offerings, meaning they're getting a lot of cash flow in

that is not cash flow for investors.

It's money that they're storing for customers that they have their name written on it. So, a lot of this cash flow is really not the investors. It's

not Marcato Libres. It's float that you owe back to the customer that you owe back to the user. When you adjust that out, the free cash yield comes down dramatically. In reality, it's closer to

dramatically. In reality, it's closer to one through like 1.6%. Somewhere in that range as it trades around. So, don't be mistaken by the high free cash flow yield. You just have to know that

yield. You just have to know that they're in the fintech business. And

like banks, that can throw off the numbers here. Now, anytime a company is

numbers here. Now, anytime a company is trading down because of an earnings per share miss, anytime a company is doing that while exceeding their revenue expectations and they're only missing on

earnings per share because they're investing heavily in their core business, things that are expected to have a high return. I feel like that that's an opportunity. This is something to look at. Marcato Libre is basically

making a willful decision to invest in AI, logistics, and other growth initiatives, and they're sacrificing short-term profitability. This is the

short-term profitability. This is the same playbook that Amazon did. These are

the same playbooks that every company that goes huge over time does. It's the

same thing that Netflix did. Netflix was

the unprofitable, debt-ridden company for 10 years. And investors that sold the company down because of that, they sold down an incredibly good company.

So, anytime I see a stock trading down to 52- week lows, going down 9 to 14% while accelerating its growth, I think that that's an interesting trade-off.

Now, I haven't done extensive research on Marcato Libre. I intend to do a deep dive on it at some point, but as of right now, I find that one very intriguing. Now, next up, we have a

intriguing. Now, next up, we have a stock that I do own, which is Into It.

This one's up big today going into earnings. Of course, we don't know

earnings. Of course, we don't know what's going to happen. uh it's likely that it will have some issue, maybe sell off a little bit after earnings. But

when I look at in it, there's a number of reasons that this stock has been crushed year-to- date. So, if we look at the most recent drop, it's down 36% into its trading at the lowest valuation that

it has in a decade on almost any metric, price to sales, price to earning, free cash flow yield, you name it. Uh it's

it's trading the cheapest it has in a decade. When we look at the concerns

decade. When we look at the concerns that investors have, it's a mixed bag.

One of them is simply just tough comparables into it had a blowout 2025.

So the tax season was incredibly good.

They have a ton of filings. They made a load of money. Now when you're comparing it to 2026, investors are saying that growth is going to be a lot harder this year because of how good of a 2025 you

had. So that's part of it is just tough

had. So that's part of it is just tough comparables. The other portion of it is,

comparables. The other portion of it is, of course, AI concerns. There's general

concerns that people will be able to file their taxes with some clawed uh personal tax plugin or something like that. I think it's unlikely. It's very

that. I think it's unlikely. It's very

difficult to do what in it's doing with personal taxes. The amount of regulatory

personal taxes. The amount of regulatory burden, the amount of red tape, how geographically specific taxes are, how personally specific they are, it's very difficult to ensure that every single

person, tens of millions of them doing taxes would have all of that done correctly with no hallucinations, no incorrect assumptions. if you're doing

incorrect assumptions. if you're doing it with AI. So I think that the tax portion of it will be more resilient than people expect. But that is another reason investors are concerned about the

AI problem with into it as well. Then

you have just the general problem with the whole sector. When an entire sector sells down, when every single SAS company's selling down, when every single software company is selling down,

when IGV, the whole ETF, the whole fund is being exited by hedge funds, it's very difficult for your stock in a specific sector to do incredibly well when the entire sector is going down.

Part of the reason it's trading down is simply the whole valuation reset within this sector. When every company's going

this sector. When every company's going down into it, it's being tossed in the mix as well. But when we look at this company, there has never been a better time for into it. It has literally never

been stronger. We look at the revenue

been stronger. We look at the revenue growth, and the revenue growth is very strong. 17% year-over-year on a trailing

strong. 17% year-over-year on a trailing 12-month basis. So, this isn't a one-off

12-month basis. So, this isn't a one-off quarter. This is their whole revenue

quarter. This is their whole revenue growing 17%. The high teens, it's likely

growing 17%. The high teens, it's likely going to grow at a very, very fast pace this year as well. We have every segment of the business growing. We have net income growing as well, 41% on the year.

We have free cash flow growing 23%. But

even when we look at the stockbased compensation, it is essentially flat.

Let's go ahead and zoom in here. Just

the past 5 years. Over the past 2 years, stockbased comp has grown by 5% while the free cash flow has grown by 20%. So

they've gotten their employee compensation under control while continuing to grow at a high speed. We

also have the earnings per share. This

grew by 42%. If we look at the dividends, they have steady dividend raises, 15% per year, and last year was no different. They raised it by 15.3%.

no different. They raised it by 15.3%.

So they continue to raise their dividends every year. They're returning

a lot of money back to the investor. In

fact, we can look at the shares outstanding. This is also going down

outstanding. This is also going down while they're raising dividends. If we

look at their return of capital, this is how much money they're giving back to investors every year. We can zoom into the past 5 years. In it has increased the amount that they're returning back

to investors by 42%. Now, this is not approving a share buyback program. This

isn't saying they're going to do it.

They've done it. This is what they're already doing. And again, while all this

already doing. And again, while all this is happening, the price to earnings is the lowest in 10 years. We have the free cash flow yield. It is the highest in 10 years. We have the price to sales, which

years. We have the price to sales, which is the lowest in 10 years. Into it

should be wellprepared, well-versed, well rehearsed to tell a great story of how they're going to flourish through this AI world. How the next Cloud plugin isn't going to disrupt their business.

They've had time. They're reporting much later than many other companies that didn't have as much time to prepare to figure out the landscape. So, I believe that they should do a good job on this

earnings call in this report of painting that picture of painting a beautiful story because the stock has great fundamentals behind it. This isn't a company where they have to hide poor fundamentals behind a great story. This

is a company that already has great fundamentals. They just need to tell the

fundamentals. They just need to tell the story as well. Now, finally, we get to everyone's favorite, which is Dolingo.

the reporting earnings today. This is

just an interesting stock. The fact that everybody has such a strong opinion on it is somewhat entertaining. But if we look at the actual numbers, we can get more more of the actual story here.

Dualingo gave a little bit of a preview of their earnings because their CFO stepped down. And whenever a CFO steps

stepped down. And whenever a CFO steps down, they try to calm investors nerves that it wasn't because this upcoming quarter is going to be really bad. So

they gave us a little bit of a preview of their numbers. what we can expect to see and this is what my my hope is right now. The latest number that we have is

now. The latest number that we have is 50.5 million daily active users for this quarter. I expect this to be above 52

quarter. I expect this to be above 52 million. So we want over 52 million

million. So we want over 52 million hopefully like 52 a.5 that would be ideal but anything above 52 million would be good. Anything below 52 million would be disappointing. So we'll look

for that in this upcoming quarter. Part

of the reason that we want to see daily user growth is because that's what they've been focusing on. They said

they're not as focused on profits today or converting people to the paid tear.

They just want to get people using the app every day. They want to increase the quality of their teaching as well. Now,

when we look at Dualingo, this is another company where you have the stock and the fundamentals and then you have the story of the company, the narrative that's going on. The stock price is down 34% year-to- date. It is one of the most

quoted companies that's going to be destroyed or displaced by AI, agentic technology, by being able to quickly code apps that are learning apps, by being able to practice language learning

in chatbt or Gemini. So why would you need Dualingo? Well, that's true. You

need Dualingo? Well, that's true. You

can make those arguments, but we also have the numbers. We have chatbt being released right around here. So that's

when chatbt was released, and then we have the growth of Dualingo. Now, if I didn't show you where the most incredible AI that we've we've seen, the first initial release of it was

released, you wouldn't be able to find it on the chart. Like, you wouldn't even be able to see when these new AIs were released. You also wouldn't be able to

released. You also wouldn't be able to see on the revenue chart where Google Translate had a big update. For

instance, they had one where they have a whole language learning module. You

won't be able to see that on the chart of Dualingo as well. In fact, if you look at the revenue chart, it almost seems like Dualingo is completely independent of all AI releases over the

past 5 years. And that's because it's it's grown like it is. See, there are companies that immediately went down in real revenue numbers. They went down

after the release of ChachiBT. For

example, if we look at Cheg, Cheg is a company that basically was a unified way to cheat on tests. You could get the answers of tests ahead of time. You

could get the answers to quizzes. people

would upload quizzes and all the answers to them so other people could copy them ahead of time. So it's basically all the company was is a place you could go and get answers to different uh test questions. Now the problem with that is

questions. Now the problem with that is uh it's much easier to do that with chat GPT. So you don't need Cheg to help you

GPT. So you don't need Cheg to help you study or to help you get answers to a question when you can just put that question in the chat GPT and immediately get all the answers anyway. And we can

visually see what type of companies have actually been impacted from artificial intelligence, from agentic technology, from vibe coding and which ones haven't.

For example, I can easily put together a chart just showing Dualingo and Cheg right next to each other. And this

illustrates the point very clearly. If

we look at this and we look at the revenue of these companies over time, just in the past 10 years, we can use the trailing 12 months. Now, we can look at these two stocks. I'll color code them. So, we have Dualingo in the green.

them. So, we have Dualingo in the green.

And we have Che and an orange here.

Let's give it a brighter orange. And we

can just look at the quarter that Chat GBT was released to illustrate the point here. When we have these two companies

here. When we have these two companies together, we can see exactly what happened. This is the quarter that

happened. This is the quarter that chatbt was released right here. So it's

right here with Cheg, right here with Dualingo. Notice how CHEG was basically

Dualingo. Notice how CHEG was basically flat. It was declining a little bit

flat. It was declining a little bit prior to CHACHBT, but literally the next quarter after CHACHBT was released, CHEG had its biggest decline and then it just

fell off a cliff as adoption picked up.

Now look at the adoption curve. Keep in

mind that from the first quarter that chatbt was released, it wasn't adopted by a wide group of people. It wasn't

mainstream, right? It was like an unknown band that only you and your buddies knew about. But then the band became popular very quickly. The

adoption curve of ChadBt was huge. So as

that adoption curve for chatbt picked up, it is inversely correlated with the adoption curve of che. Chacht picked up,

che went down. Meanwhile, from that exact same starting point, Dolingo doesn't even seem like it is affected at all. Duolingo continues to grow at pace.

all. Duolingo continues to grow at pace.

So we have an example of a stock that was actually affected by artificial intelligence by LLMs. Then we have an example of a stock at the same time period that's being priced as though

it's affected when it's not. You cannot

see any of these things in the numbers.

You can't see when Google released their latest AI translation tool or their learning modules. You can't see on the

learning modules. You can't see on the revenue charts when the vibe coded competitors come in. You can't see when Chadbt was released or when Gemini model was released or when they got their big upgrades. None of that shows up in the

upgrades. None of that shows up in the revenue chart for Duelingo. They're

growing as if none of that even existed.

When we look at the subscription revenue, this continues to grow at a very fast pace. Again, we look at the daily active users. This continues to grow. We'll see what the numbers are.

grow. We'll see what the numbers are.

Even the monthly active users, which they say is not a focus of theirs. They

want the daily active users, but even the monthly active are growing 20% year-over-year. Then we have the paid

year-over-year. Then we have the paid subscribers growing 33%. All of these numbers are going up to the right with no impact visible from artificial intelligence. What Duelingo needs to

intelligence. What Duelingo needs to show today is another quarter of solid growth, solid earnings per share growth, solid revenue growth, solid daily active user growth, and even paid subscriber

growth. If they can do that quarter

growth. If they can do that quarter after quarter after quarter, I believe that there's a good chance that this stock could pop. We'll see. It may not be this quarter. This could be one that

sinks the stock below $100 per share. I

wouldn't be surprised, but as long as the numbers keep going up and to the right, I'll continue to hold. I'll have

more analysis follow-up after the earnings come out. That's going to be it for this episode.