Key Points

Figma continues to face worries over AI advancements.
Supportive analyst notes aided stabilization and sparked a rebound in July.
10 stocks we like better than Figma ›

Shares of Figma (NYSE: FIG) fell sharply last month amid a wider retreat among software names, fueled by ongoing AI disruption concerns, especially after Anthropic introduced Claude Design in April.

Even after the slide, upbeat analyst remarks helped steady the shares in late June, paving the way for gains early in July.

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Per S&P Global Market Intelligence figures, the stock closed the month down 29%. As the chart illustrates, the bulk of Figma's declines occurred in the first half.

FIG data by YCharts

What happened with Figma

Figma has traded publicly for nearly a year. An initial post-IPO surge gave way to a sharp fall on valuation worries followed by AI disruption fears.

Soft results from software peers including Salesforce, Adobe, and Oracle, added to the early-month pressure, as investors fretted that seat-based SaaS firms like Figma could lose ground to AI tools.

Few company-specific headlines surfaced early, yet Figma has emerged as a symbol of the "SaaSpocalypse," with its design platform viewed as vulnerable and some rivals reporting higher churn from AI options.

The shares began to stabilize later after Citigroup launched coverage with a buy rating and $36 target. Channel checks pointed to solid AI momentum at Figma, including seat upgrades set to support results ahead.

The firm hosted its yearly Config conference near the end of June. Key reveals included code layering in Figma plus seamless shifts between design and code layers.

Analysts shared positive views after the event, though these did not spark a major move.

Image source: Getty Images.

What's next for Figma

Figma has rebounded in July, recovering more than half its June losses by July 7. Another buy rating helped, as investors appear to shift from chip names back to software amid worries the chip sector has overheated.

The next update arrives in August, but sustained revenue growth near 40% could lift the stock further.

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Citigroup is an advertising partner of Motley Fool Money. Jeremy Bowman has positions in Figma. The Motley Fool has positions in and recommends Adobe, Figma, Oracle, and Salesforce. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.