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Figma's Stellar IPO Debut Sparks Debate on AI's Impact on Design Software
25 Aug
Summary
- Wall Street brokerages initiate neutral coverage on Figma's lofty valuation
- Figma's market value exceeds $20B buyout deal with Adobe
- AI adoption seen as both a potential headwind and tailwind for Figma
On August 25, 2025, Wall Street brokerages began their coverage of Figma, the design software company that made a stellar debut on the New York Stock Exchange last month. The analysts have initiated neutral ratings on the stock, as they weigh the company's lofty valuation against its potential for artificial intelligence-driven growth.
Figma's share price more than doubled from its IPO price of $33 to $85 upon its market debut, paving the way for high-profile tech listings as deal activity rebounded from tariff-driven volatility. However, the company's current market value of $37.68 billion now far exceeds the $20 billion price tag from a now-abandoned buyout deal with industry giant Adobe.
While analysts view Figma as a market-leading platform, they believe the company's valuation is pricing in a long runway for growth, limiting the near-term risk-reward potential. The brokerages, including J.P. Morgan, RBC Capital Markets, and Morgan Stanley, have initiated the equivalent of 'hold' ratings on the stock.
One key concern is the threat of AI adoption in the design software industry. Figma had flagged intense competition and the potential for AI to automate design tasks as a headwind in its IPO filing. However, some analysts believe AI could also be a tailwind for the company, as it could enhance the efficiency of workflows and cut costs for Figma's customers.
