Morgan Stanley Downgrades Online Education Stocks Over AI Competition Fears
• Morgan Stanley downgraded Chegg, Duolingo, and Coursera stocks over concerns that AI could negatively impact their business models going forward.
• Specifically, AI tools like ChatGPT could replace or disrupt some of the educational services these companies provide.
• Chegg's CEO previously warned about ChatGPT's potential impact last spring. Goldman cites weaker enterprise revenues as an issue for Coursera.
• Duolingo was downgraded despite Goldman maintaining its $160 price target on the stock.
• These stocks saw huge gains during the pandemic as people turned to online learning, but now face pressures from AI and the return to in-person classes.