Figma Stock Volatility Amid AI Competition
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 hours ago
0mins
Source: Fool
- Stock Decline: Figma's stock fell 29% in June, primarily due to heightened market fears of AI disruption, particularly after Anthropic launched its competing product, Claude Design, leading to a broader pullback in software stocks.
- Analyst Rating Recovery: Despite challenges, Citigroup initiated coverage with a buy rating and a $36 price target at the end of June, indicating strong confidence in Figma's AI-related business, which is expected to drive revenue growth in the coming quarters.
- Conference Highlights: At the global design conference Config, Figma announced the ability to layer code into its design platform, a feature that could attract more users and enhance product competitiveness, although it did not significantly boost the stock price.
- Market Rebound Signs: By early July, Figma's stock had recovered more than half of its June losses, reflecting renewed investor interest in software stocks; if the company can maintain around 40% revenue growth, the stock is likely to rise further.
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Analyst Views on FIG
Wall Street analysts forecast FIG stock price to rise
9 Analyst Rating
3 Buy
6 Hold
0 Sell
Moderate Buy
Current: 21.080
Low
38.00
Averages
53.13
High
70.00
Current: 21.080
Low
38.00
Averages
53.13
High
70.00
About FIG
Figma, Inc. designs and develops platforms for people who build digital products together. The Company helps cross-functional teams align and build software more efficiently and ensure the advanced access and controls that large organizations require. Its products include Figma Design, Dev Mode, Figma Sites, Figma Make, Figma Draw, Figma Buzz, FigJam and Figma Slides. Figma Sites is a product that lets clients design a Website and directly publish it to the Web, with a custom URL. Figma Make is an AI-powered tool that turns a prompt into a fully functional prototype. Figma Buzz is a product for easily creating marketing assets (like social media assets and digital ads) at a scale that is consistent with brand or visual identity. Figma Draw provides a space for finer vector editing required when drawing detailed iconography and product illustrations. Figma Design combines powerful features with a collaborative workspace to help teams design and build better products together.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Figma Stock Volatility Amid AI Competition
- Stock Decline: Figma's stock fell 29% in June, primarily due to heightened market fears of AI disruption, particularly after Anthropic launched its competing product, Claude Design, leading to a broader pullback in software stocks.
- Analyst Rating Recovery: Despite challenges, Citigroup initiated coverage with a buy rating and a $36 price target at the end of June, indicating strong confidence in Figma's AI-related business, which is expected to drive revenue growth in the coming quarters.
- Conference Highlights: At the global design conference Config, Figma announced the ability to layer code into its design platform, a feature that could attract more users and enhance product competitiveness, although it did not significantly boost the stock price.
- Market Rebound Signs: By early July, Figma's stock had recovered more than half of its June losses, reflecting renewed investor interest in software stocks; if the company can maintain around 40% revenue growth, the stock is likely to rise further.
See More
Figma Shares Plunge 29% in June Amid AI Fears
- Significant Price Drop: Figma's shares fell 29% in June, primarily due to heightened market fears of AI disruption, particularly after competitor Anthropic launched Claude Design, leading to decreased investor confidence in software stocks.
- Analyst Rating Recovery: Despite the decline, Citigroup initiated coverage with a buy rating and a $36 price target at the end of June, reflecting confidence in Figma's AI application potential, which is expected to drive revenue growth in the coming quarters.
- Impact of Design Conference: At the global design conference held in late June, Figma announced several new features, including the ability to switch between code and design layers; however, despite positive analyst commentary, these updates did not significantly boost the stock price, indicating cautious market sentiment about its future.
- Future Outlook: Figma rebounded in early July, recovering over half of its June losses, and if it can maintain around 40% revenue growth, the stock is expected to rise further, although market confidence in its long-term growth remains to be strengthened.
See More
Bank of America Reinstates Figma Buy Rating with $30 Price Target
- Rating Reinstatement: Bank of America has reinstated Figma's coverage with a Buy rating and a price target of $30, with analyst Tal Liani noting that artificial intelligence is likely to be a 'tailwind,' resulting in a 5% rise in premarket trading.
- Market Recovery: Despite Figma's stock being down 85% from its 52-week high, the analyst believes AI's impact will be positive, particularly as the company transitions to a hybrid consumption/seat-based pricing model, creating new monetization opportunities.
- Customer Engagement Surge: In Q1 2026, 75% of enterprise customers purchased additional AI credits after exceeding their initial usage limits, indicating strong customer engagement and willingness to spend, suggesting robust momentum in the enterprise market.
- Strong Growth Metrics: Customers generating over $100k in ARR increased by 48% year-over-year, while retention metrics remain strong with a 139% net dollar retention (NDR) and 54% growth in paid users.
See More
Key Wall Street Rating Updates on Tuesday
- Deutsche Bank Upgrade: Deutsche Bank upgraded First Solar from hold to buy, citing its compelling fundamentals and strong balance sheet, making it an attractive option for investors in the U.S. panel production sector.
- TD Cowen Initiations: TD Cowen initiated coverage on US Foods, Chefs' Warehouse, and Performance Foods with buy ratings, projecting USFD to achieve 5% revenue growth and 20% EPS growth in the medium term, highlighting its diversified exposure to high-margin subsegments.
- Morgan Stanley on Kingsoft Cloud: Morgan Stanley initiated Kingsoft Cloud as overweight, noting its successful transition from a mid-tier cloud player to an AI cloud provider, with accelerating revenue and improving profitability supported by Xiaomi and Kingsoft Group's ecosystem.
- Goldman Sachs on Rentokil: Goldman Sachs upgraded Rentokil from neutral to buy, expecting steady improvement in organic growth in pest services, aiming for mid-single-digit organic growth by 2027 as the company's growth strategy takes effect.
See More
Figma's 9% Surge Leads Software Stocks Rally Amid Mixed Semiconductor Sector
- Figma Product Launch: Figma's introduction of several new products, including AI-powered coding tools integrated into its creative design platform, led to a 9% stock price increase during Wednesday's trading, indicating strong market recognition of its innovative capabilities and potentially solidifying its leadership in the design software market.
- Analyst Rating Upgrade: Citi initiated coverage of Figma with a Buy rating, reflecting analysts' confidence in its future growth potential, which may attract more investor interest, thereby driving up stock prices and enhancing its competitive position in the market.
- Software Sector Rally: In addition to Figma, stocks of companies like Monday.com, Wix.com, and ServiceNow rose by 6%, 8.5%, and 6% respectively, indicating a broader recovery trend in the software industry, likely due to investors reassessing AI-related technologies and restoring confidence in the sector.
- Intensified Cloud Market Competition: The emergence of cloud computing businesses from Meta and SpaceX has shaken the market, with major cloud providers like Microsoft and Amazon seeing slight gains, while companies like Nebius and CoreWeave faced significant declines, highlighting the increased competitive risks that could impact future market dynamics.
See More
Zhipu's GLM 5.2 Emerges as a Competitive AI Model
- Open Source Breakthrough: Zhipu's GLM 5.2 has achieved performance close to Anthropic's Opus 4.8 on a key intelligence benchmark, while costing only a fifth of its price, showcasing its strong competitiveness in the AI market.
- Developer Surge: The rapid increase in OpenRouter token traffic indicates that GLM 5.2 is attracting a significant number of developers, surpassing the growth seen after the launch of DeepSeek V4, reflecting market recognition of its potential.
- Enterprise Automation Demand: GLM 5.2 excels in agentic tasks such as planning, coding, and testing, addressing the urgent need for efficient AI solutions among enterprises, particularly in the context of unexpectedly high AI spending.
- Future of Open Source AI: The free availability and self-hosting capabilities of GLM 5.2 exert pricing pressure on closed-source models, while providing a safer alternative amid increasing government regulation.
See More
Figma Stock Volatility Amid AI Competition
- Stock Decline: Figma's stock fell 29% in June, primarily due to heightened market fears of AI disruption, particularly after Anthropic launched its competing product, Claude Design, leading to a broader pullback in software stocks.
- Analyst Rating Recovery: Despite challenges, Citigroup initiated coverage with a buy rating and a $36 price target at the end of June, indicating strong confidence in Figma's AI-related business, which is expected to drive revenue growth in the coming quarters.
- Conference Highlights: At the global design conference Config, Figma announced the ability to layer code into its design platform, a feature that could attract more users and enhance product competitiveness, although it did not significantly boost the stock price.
- Market Rebound Signs: By early July, Figma's stock had recovered more than half of its June losses, reflecting renewed investor interest in software stocks; if the company can maintain around 40% revenue growth, the stock is likely to rise further.
See More
Figma Shares Plunge 29% in June Amid AI Fears
- Significant Price Drop: Figma's shares fell 29% in June, primarily due to heightened market fears of AI disruption, particularly after competitor Anthropic launched Claude Design, leading to decreased investor confidence in software stocks.
- Analyst Rating Recovery: Despite the decline, Citigroup initiated coverage with a buy rating and a $36 price target at the end of June, reflecting confidence in Figma's AI application potential, which is expected to drive revenue growth in the coming quarters.
- Impact of Design Conference: At the global design conference held in late June, Figma announced several new features, including the ability to switch between code and design layers; however, despite positive analyst commentary, these updates did not significantly boost the stock price, indicating cautious market sentiment about its future.
- Future Outlook: Figma rebounded in early July, recovering over half of its June losses, and if it can maintain around 40% revenue growth, the stock is expected to rise further, although market confidence in its long-term growth remains to be strengthened.
See More
Bank of America Reinstates Figma Buy Rating with $30 Price Target
- Rating Reinstatement: Bank of America has reinstated Figma's coverage with a Buy rating and a price target of $30, with analyst Tal Liani noting that artificial intelligence is likely to be a 'tailwind,' resulting in a 5% rise in premarket trading.
- Market Recovery: Despite Figma's stock being down 85% from its 52-week high, the analyst believes AI's impact will be positive, particularly as the company transitions to a hybrid consumption/seat-based pricing model, creating new monetization opportunities.
- Customer Engagement Surge: In Q1 2026, 75% of enterprise customers purchased additional AI credits after exceeding their initial usage limits, indicating strong customer engagement and willingness to spend, suggesting robust momentum in the enterprise market.
- Strong Growth Metrics: Customers generating over $100k in ARR increased by 48% year-over-year, while retention metrics remain strong with a 139% net dollar retention (NDR) and 54% growth in paid users.
See More
Key Wall Street Rating Updates on Tuesday
- Deutsche Bank Upgrade: Deutsche Bank upgraded First Solar from hold to buy, citing its compelling fundamentals and strong balance sheet, making it an attractive option for investors in the U.S. panel production sector.
- TD Cowen Initiations: TD Cowen initiated coverage on US Foods, Chefs' Warehouse, and Performance Foods with buy ratings, projecting USFD to achieve 5% revenue growth and 20% EPS growth in the medium term, highlighting its diversified exposure to high-margin subsegments.
- Morgan Stanley on Kingsoft Cloud: Morgan Stanley initiated Kingsoft Cloud as overweight, noting its successful transition from a mid-tier cloud player to an AI cloud provider, with accelerating revenue and improving profitability supported by Xiaomi and Kingsoft Group's ecosystem.
- Goldman Sachs on Rentokil: Goldman Sachs upgraded Rentokil from neutral to buy, expecting steady improvement in organic growth in pest services, aiming for mid-single-digit organic growth by 2027 as the company's growth strategy takes effect.
See More
Figma's 9% Surge Leads Software Stocks Rally Amid Mixed Semiconductor Sector
- Figma Product Launch: Figma's introduction of several new products, including AI-powered coding tools integrated into its creative design platform, led to a 9% stock price increase during Wednesday's trading, indicating strong market recognition of its innovative capabilities and potentially solidifying its leadership in the design software market.
- Analyst Rating Upgrade: Citi initiated coverage of Figma with a Buy rating, reflecting analysts' confidence in its future growth potential, which may attract more investor interest, thereby driving up stock prices and enhancing its competitive position in the market.
- Software Sector Rally: In addition to Figma, stocks of companies like Monday.com, Wix.com, and ServiceNow rose by 6%, 8.5%, and 6% respectively, indicating a broader recovery trend in the software industry, likely due to investors reassessing AI-related technologies and restoring confidence in the sector.
- Intensified Cloud Market Competition: The emergence of cloud computing businesses from Meta and SpaceX has shaken the market, with major cloud providers like Microsoft and Amazon seeing slight gains, while companies like Nebius and CoreWeave faced significant declines, highlighting the increased competitive risks that could impact future market dynamics.
See More
Zhipu's GLM 5.2 Emerges as a Competitive AI Model
- Open Source Breakthrough: Zhipu's GLM 5.2 has achieved performance close to Anthropic's Opus 4.8 on a key intelligence benchmark, while costing only a fifth of its price, showcasing its strong competitiveness in the AI market.
- Developer Surge: The rapid increase in OpenRouter token traffic indicates that GLM 5.2 is attracting a significant number of developers, surpassing the growth seen after the launch of DeepSeek V4, reflecting market recognition of its potential.
- Enterprise Automation Demand: GLM 5.2 excels in agentic tasks such as planning, coding, and testing, addressing the urgent need for efficient AI solutions among enterprises, particularly in the context of unexpectedly high AI spending.
- Future of Open Source AI: The free availability and self-hosting capabilities of GLM 5.2 exert pricing pressure on closed-source models, while providing a safer alternative amid increasing government regulation.
See More
