Figma Shares Jump 5% After Citi Initiates Buy Rating, Targets $36
C•Citi initiated coverage of Figma with a Buy rating and $36 price target, sending shares up about 5% after a year-to-date drop of over 50%. The broker cited strong enterprise seat upgrades, growing AI credit consumption and upcoming product innovations, though mid-August share lock-up expiration may increase volatility.
1. Coverage Initiation and Share Reaction
Citi initiated coverage of Figma with a Buy rating and set a $36 price target, implying roughly 100% upside from recent levels. The announcement propelled shares higher by about 5% in midweek trading.
2. AI-Driven Growth Outlook
The broker highlighted Figma's expanding AI capabilities as a key growth driver, expecting increased usage and new monetization opportunities from AI-powered design features. Analysts pointed to the firm’s successful integration of AI workflows to support enterprise collaboration.
3. Enterprise Demand Indicators
Industry checks revealed strong demand from large technology and financial services clients, with customers upgrading user seat packages and consuming additional AI credits. These trends signal potential for accelerating subscription revenue as AI features become more central.
4. Lock-Up Expiration Watch
Investors will monitor the mid-August share lock-up expiration, which could introduce short-term volatility as restricted shareholders gain selling rights. Despite this event, the firm remains confident in Figma’s long-term position within the AI-driven software market.
