Figma's stock has tumbled sharply this year, now trading near its all-time low. Shares closed at $21.54 on Monday, an 85% drop from their peak. The decline reflects growing investor anxiety over a potential “SaaSpocalypse,” where advanced AI tools like Claude and ChatGPT could erode demand for traditional software-as-a-service platforms. However, recent financial data suggests the company's core business remains resilient.
Revenue Growth Persists Despite AI Threats
Figma, a leader in collaborative design software, has seen its platform adopted by more teams for UI/UX design, prototyping, and real-time collaboration. While the broader SaaS sector has been under pressure from AI advancements, Figma's latest earnings show continued momentum. Revenue surged 48% year-over-year to $370 million in the last quarter, beating both company guidance and analyst expectations.
The growth was broad-based, with both small startups and large enterprises expanding their use of Figma. The number of customers paying over $10,000 annually rose to nearly 16,000, while those spending more than $100,000 per year increased to 1,635. This expansion occurred even as Figma transitioned to a credit-based pricing model, offering 3,000 credits monthly for Professional plans, 3,500 for Organization, and 4,250 for Enterprise tiers.
Web traffic data from SimilarWeb reinforces the positive trend, with Figma's site attracting 77.5 million visits last month. Wall Street expects this growth to continue, with consensus estimates projecting $376 million in revenue for the upcoming quarter, a 37% increase from the prior year. For the full year, analysts forecast revenue of $1.47 billion, up 39%, followed by $1.82 billion in the next fiscal year.
Management Embraces AI as an Opportunity
Figma's leadership has dismissed the notion that AI will disrupt its business, instead integrating AI to enhance its offerings. The company recently launched Figma Agent, a first-party AI assistant embedded in its canvas that automates tasks and generates motion animations. CEO Dylan Field stated, “The tools are changing, the creative possibilities are expanding and Figma finds itself at the forefront of this shift. We have so much work ahead and even more left to build for our customers.”
Analyst sentiment remains largely bullish. Wells Fargo has set a price target of $30, while Bank of America, Citigroup, and Morgan Stanley have targets of $33, $37, and $33, respectively. These targets imply significant upside from current levels, suggesting that the market may be overestimating the AI threat.
Technical Analysis Points to Potential Support
From a technical standpoint, Figma's stock has been in a downtrend since its IPO. It hit a record low of $16.48 in April, rebounded to $28 in June, and then retested that level before climbing to $31. Recently, shares have traded below the 50-day moving average and the Supertrend indicator, forming a bearish flag pattern. The most likely scenario is a retest of the $16.48 support, which could create a triple-bottom pattern—a formation that often precedes a strong rebound. A break below that level would signal further downside.
Investors are weighing the company's solid fundamentals against the broader market's fear of AI disruption. While the stock's decline may seem justified by the “SaaSpocalypse” narrative, the actual business metrics tell a different story. With revenue growing at nearly 50% and a loyal customer base, Figma could be a contrarian play for those willing to look past the current pessimism.
This article is for informational purposes only and does not constitute financial advice.
