Figma's stock climbed Thursday after the design collaboration platform crushed earnings expectations with 40% year-over-year revenue growth to $303.8 million. But the celebration on Wall Street came with a caveat - analysts are raising red flags about mounting competitive pressure from AI-native design tools that could threaten the company's dominance in the collaborative design space.
Figma just delivered the kind of quarter that usually sparks unqualified enthusiasm on Wall Street. Revenue hit $303.8 million, a 40% jump from the same period last year, easily topping analyst estimates. Shares climbed in extended trading as the design platform proved it's still the go-to tool for product teams across tech.
But analyst notes following the earnings call revealed a more complicated picture. Several firms upgraded their price targets while simultaneously highlighting what they're calling "structural AI risk" - the possibility that generative AI tools could fundamentally reshape how design work gets done, potentially bypassing Figma's collaborative workflow altogether.
The tension reflects a broader anxiety rippling through the SaaS world. Tools that seemed indispensable 18 months ago now face questions about whether AI agents might automate away their core value proposition. For Figma, which built its $20 billion private valuation on being the central nervous system for design teams, that's an existential question.
The company has been racing to integrate AI features into its platform, rolling out generative design tools and smart layout assistants. But analysts point out that defense isn't the same as offense. Startups like Galileo AI and Uizard are building AI-first design tools that skip the traditional canvas altogether, generating production-ready interfaces from text prompts.
"Figma's doing everything right operationally," one analyst wrote in a note to clients. "But the market they're dominating might be shrinking faster than they can expand into adjacent categories."
The 40% growth rate tells you Figma isn't losing customers yet. Enterprise adoption continues to accelerate, with major tech companies standardizing on the platform for design systems and prototyping. The network effects remain powerful - once a team is on Figma, switching costs are high.
