Duolingo's unbelievably effective AI Technology

In partnership with

We put your money to work

Betterment’s financial experts and automated investing technology are working behind the scenes to make your money hustle while you do whatever you want.

Learn more

Hello and happy Sunday! In today’s edition, we’re unpacking some fascinating developments across tech, finance, and global trade. From the shifting interest in AI to the impact of rate cuts, here’s what’s on the agenda:

• AI’s fading buzz: Is AI losing its appeal, or just shifting focus?

• Post-rate cuts: How sectors perform after the Fed eases rates.

• Global trade: A new record in global economic integration.

• Duolingo’s milestone: Over 100 million active users and growing.

• Sweetgreen’s bet: Can automation turn their salads into profits?

Anyone Googling AI?

AI has been the talk of the town lately, with media and finance folks obsessing over when, or if, the massive investments in the technology will pay off. Everyone’s wondering if AI will live up to the hype or if it’s destined to flop under the weight of expectations and potential regulations. But while companies and investors can’t seem to stop talking about AI, regular people seem to be losing interest. Search volume for AI in the US hit its peak back in May and has been on the decline since, putting AI at risk of becoming just another faded tech trend like NFTs and the metaverse 🧟‍♀️.

Now, just because fewer people are Googling AI doesn’t mean the tech won’t have a bright future. It might just mean that the initial buzz is wearing off, or people are shifting their focus to more specific AI topics. Or maybe, they’re just over it. That said, the trend could still reverse and pick up steam again, but for now, AI’s buzz seems to be cooling off.

What To Expect After The Initial Rate Cuts

This chart highlights how different US sectors perform relative to the broader market in the 12 months following Federal Reserve rate cuts. Green areas show sectors doing better than the market, while red areas show those lagging behind.

After the Fed starts cutting rates 🎊🥳, pro-cyclical sectors like consumer cyclicals and services shine, especially after six months. Over a year, consumer cyclicals, tech, non-cyclicals, and healthcare sectors tend to lead, thanks to increased consumer spending, business investment, and appealing dividend yields from lower interest rates.

On the flip side, utilities and finance usually underperform during this period. And let’s not forget, political policies can also play a big role in how the next round of rate cuts impacts these sectors.

We’re More Global Than Ever

According to the latest stats from the World Bank, global trade—meaning all the exports and imports—accounted for 63% of the world’s GDP in 2022, which is the highest it's ever been. This "trade openness index" basically shows how much international trade impacts the global economy.

Looking at the trend since 1970, it’s been a bit of a rollercoaster. There was a big dip in 2020 thanks to the pandemic, but by 2022, trade bounced back stronger than ever ⬆️🚀. For some context, back in 1912 during the "first wave of globalization," this index was only around 30%. After the World Wars slowed things down, trade picked up again, crossing 50% at the start of the 21st century.

What’s interesting is that while global trade hit a record high in 2022, not every country followed the same path. For example, China’s trade was 65% of GDP in 2006 but dropped to 38% by 2022. Overall, though, global trade is more important now than it’s ever been.

Still Not A Paid User?

Duolingo, the language-learning app with that relentless green owl mascot, has now crossed a major milestone: over 100 million monthly active users 👀👀. Not too shabby for an app that started in 2011 and is known just as much for its quirky marketing—think Dua Lipa references and playful social media antics—as it is for teaching languages.

The company’s latest earnings report, released Wednesday, showed its 5th straight profitable quarter, with $190 million in bookings and over $24 million in net income—a sixfold increase from the same period last year. This news sent Duolingo’s shares up more than 10% 📈, even though the stock has had a rocky year, still down 21% year-to-date. Analysts have pointed to slowing growth in daily active users as a reason for investor caution.

Duolingo’s secret sauce? Making learning feel like a game. Users earn XP, collect gems, and strive to maintain their daily streaks, which is a big hit with Gen Z, who grew up on video games. But it’s not just the gamification that’s made Duolingo a household name—it’s also the app’s quirky, meme-worthy social media presence that’s really helped the brand take off.

Well, These Salads Are Still Too Cheap…

Sweetgreen’s stock surged over 30% Friday after they reported nearly $185 million in Q2 sales, thanks to popular salads like the “Chicken Pesto Parm” and “Kale Caesar.” But even with salads priced at $15, $16, or even $18, Sweetgreen is still in the red—though they’re getting closer to breaking even. They’ve cut their losses from $2.56 per $15 of revenue in Q1 to $1.31 now.

Their core operations are doing well, with a 22% profit margin, boosted by new menu items like caramelized steak. But once you add in overheads, depreciation, and pre-opening costs, they’re still not quite profitable.

Investors, who value the company at over $3 billion, are hopeful that Sweetgreen’s growth will continue, especially with the rollout of their “Infinite Kitchen”—automated kitchens where robots make and serve salads. 🤖🥗 Sweetgreen’s CEO says over 50% of new locations will have this tech next year, and some spots with the Infinite Kitchen are already seeing margins above 31%. So, while they’re not there yet, Sweetgreen is betting on automation to help them turn a profit.