The design tool Figma has lost 84% of its value since its peak, and investors are writing it off as a casualty of artificial intelligence. Yet the company’s business is strong: revenue is growing at its fastest pace since its IPO. The stock price has thus deviated significantly from its underlying fundamentals.
The Company Adobe Wanted to Buy for $20 Billion
Few tech companies have gone public with a reputation quite like Figma’s. The app and web design tool, launched in 2012 by Dylan Field and Evan Wallace, has become the standard for teams around the world. Today, over 13 million people use it every month, and most of them aren’t designers, but product managers, developers, and managers for whom Figma has become a place where the company thinks together.
Just how valuable the product is was demonstrated as early as 2022 by Adobe $ADBE, which offered a staggering $20 billion for Figma. The deal ultimately fell through. At the end of 2023, European and British regulators blocked the deal due to competition concerns. Paradoxically, this only added to Figma’s fame.
When the company went public on the New York Stock Exchange on July 31, 2025, under the ticker $FIG, the euphoria knew no bounds. Shares priced at $33 opened around $85. They closed at $115 on the first day and later climbed as high as $143. Figma’s market value at that point exceeded $60 billion. But then the sell-off began.
When AI Is Set to Devour Its Own Creator
Today, the stock is trading around $23, roughly 84% below its peak. Over $50 billion has evaporated from the company’s market value. One of last year’s hottest IPOs has become one of the worst-performing stocks on Wall Street.
What happened? The market got scared of artificial intelligence. If a model can now generate a finished app or website from a single sentence, what’s the point of a design platform anymore? This concern has sent virtually the entire software sector tumbling, and it has hit Figma particularly hard because the company straddles the line between idea and finished product.
The trigger for the sharpest decline was April 2026, when Anthropic unveiled Claude Design, an AI tool that transforms text prompts into finished prototypes—exactly what Figma does. The market reacted with panic, and Dylan Field himself, during the earnings call, specifically named Anthropic as a competitor capable of pairing its own AI model with its own product.
When code becomes a commodity, design is the competitive advantage.
Dylan Field, co-founder and CEO of Figma
The numbers tell a different story
While the stock was falling, the business itself was performing better than ever. In the first quarter of 2026, Figma’s revenue grew by 46% to $333.4 million. Growth accelerated for the second quarter in a row, from 38% to over 40% and up to the aforementioned 46%.
Key figures:
Revenue +46% year-over-year, exceeding the upper end of the company’s own outlook
Net dollar retention 139% —the highest in more than two years, meaning existing customers are spending more and more
690,000 paying customers, a 54% year-over-year increase
The company raised its full-year revenue outlook to approximately $1.42 billion
Customers using Figma along with its AI features include companies such as Google $GOOG, Uber $UBER, Airbnb $ABNB, and Lufthansa. Companies are rushing headlong into AI today, and instead of turning away from Figma, they’re using it more intensively. What investors feared as an existential threat is, for now, showing up in the numbers as a tailwind.
The better AI gets, the faster Figma grows, and the more deeply customers integrate our platform into their daily processes.
Praveer Melwani, CFO of Figma
From 60x to 8x: Where Is the Right Price Now?
The key lies in valuation. After going public, Figma traded at an incredible 60 times annual revenue—based on the assumption that it would continue to grow at a breakneck pace for many years to come. Such numbers are a recipe for a hard fall at the first sign of nervousness. And that came in the form of concerns about AI.
Today, the valuation is somewhere else entirely, at around 8 times revenue. That’s a figure many would consider rather modest for a company growing at 46% annually.
Analysts are cautious. Goldman Sachs $GS maintains a neutral rating on the stock and, in response to the results, even lowered its price target, noting that while the quarter was excellent, competition from AI-native tools is a real concern. Furthermore, part of the market is waiting to see how sustainable the revenue from new AI features—which the company is only just beginning to charge for—will actually be.
We want to see better evidence of just how large and how sustainable AI revenue will actually be.
Nick Altmann, BTIG analyst
On one hand, there’s a company that’s gaining momentum, maintaining record-high customer loyalty, and raising its outlook. On the other hand, there’s a stock trading near its all-time low, as if the market were anticipating a slow decline. One of those two narratives is wrong—and investors aren’t sure which one yet.