• Figma has been swept up in a broad software sell-off as investors reassess design-focused tools amid rising concerns that artificial intelligence could erode traditional software revenue models, even as the company prepares to report its fourth-quarter 2025 results on February 18, 2026.
• At the same time, Figma is pushing deeper into AI through initiatives such as its acquisition of design start-up Weavy, now Figma Weave, aiming to keep its collaborative browser-based platform central to how teams build digital products.
• With this backdrop and recent share price weakness, we’ll examine how Figma’s AI reinvention efforts shape its investment narrative for investors.

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What Is Figma's Investment Narrative?

To own Figma, you really have to believe that browser-native, collaborative design will stay at the center of how digital products are built, even as AI reshapes what “design work” looks like. The recent software sell-off and Figma’s sharp share price drop have not changed the core near term catalyst in front of investors: the Q4 2025 earnings release on February 18, where the market will test whether revenue momentum and AI messaging still line up with earlier guidance. What has shifted is the balance between opportunity and risk. The stock now trades meaningfully below consensus targets, yet concern about AI cannibalizing design tools, large ongoing losses, rich sales multiples and high CEO pay is more front of mind. The Weavy acquisition and the ServiceNow partnership are concrete steps toward making AI a tailwind rather than a threat, but the next few quarters will be important to show that those bets can offset competitive and valuation pressure.

However, investors should not overlook how AI fears and persistent losses could still pressure sentiment. Figma's share price has been on the slide but might be up to 31% below fair value. Find out if it's a bargain.

Exploring Other Perspectives

Twenty eight fair value estimates from the Simply Wall St Community span roughly US$17 to above US$150 per share, reflecting very different expectations. Set against recent share price weakness and AI related uncertainty, these views underline why many market participants are watching Figma’s upcoming earnings and AI execution especially closely.

Explore 28 other fair value estimates on Figma - why the stock might be worth 33% less than the current price!

Build Your Own Figma Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Figma research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Figma research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Figma's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.