Figma debuted on July 31 at $33 per share and soared to $142.92 the next day before collapsing. As of early January, the stock trades just above its IPO level, representing a nearly 75% decline from its peak. While this level of volatility is uncommon even for cloud-based software IPOs, it underscores both the market’s excitement and its impatience following two consecutive earnings reports that, despite showing solid business performance, fell short of Wall Street projections.

In 2022, Adobe agreed to acquire Figma for $20 billion before regulatory hurdles forced the deal’s cancellation. Today, Figma’s market capitalization stands at approximately $18.5 billion—below the price Adobe was willing to pay when Figma was a smaller company and before its AI initiatives. Given Figma’s expanded product suite, larger customer base and stronger revenue trajectory since then, the Adobe valuation provides a tangible floor for the current share price and highlights potential upside if the company continues executing.

Figma has launched multiple AI-driven tools over the past year, including a prompt-to-app generator, a one-click website publishing feature and an AI assistant for brand and marketing teams. The company also acquired Weavy, rebranded as Figma Weave, to integrate AI-powered interface design directly into its platform. While initial guidance suggested these investments would temper near-term margins, management believes these capabilities will cement Figma’s leadership in web and product design as AI adoption accelerates across enterprises.

In its most recent quarter, Figma reported revenue of $274.2 million, up 38% year-over-year, and adjusted operating income of $34 million. A one-time non-cash IPO expense temporarily depressed GAAP profit, but the business remains cash-flow positive. With approximately $1.5 billion in cash and marketable securities on the balance sheet, the stock trades at roughly 15 times forward revenue on a net-cash basis. This combination of high growth, strong margins and a healthy liquidity cushion positions Figma for sustained expansion and potential market-beating returns.