Figma stock plunges 11% as Google's AI design tools spark investor concerns about competition

Figma's stock drops 11% in two days after Google releases 'vibe design' product

Dylan Field, co-founder and CEO of Figma, appears on the floor of the New York Stock Exchange on July 31, 2025. Figma's downward slide this year, driven by concerns about artificial intelligence, intensified over the past two days after Google intoduced an AI-powered design product. On Tuesday, Google released a new product in beta called Stitch, which lets users enter a prompt to create a design for their projects. Google claims the feature is a "design agent" that can give real-time design critiques, and that responds to voice. Google isn't charging for Stitch, nor does it make promises about the availability of the service. But with Wall Street on edge regarding all potential threats from AI, Figma is getting punished. Shares of Figma dropped 8% on Wednesday followed by a decline of more than 3% on Thursday. The stock is down about 35% this year, tumbling alongside a broader slide in the software industry. Adobe shares are down about 4% over the past two days. Should Google launch its new feature to paying customers in the future, it could represent an effort to own more of the product design workflow and to keep users inside its enterprise ecosystem. The company has deep pockets, massive distribution, and a willingness to bundle products. Google didn't immediately respond to request for comment. In October, Google Cloud and Figma announced an expanded partnership that involved more of Google's generative AI technology being added into Figma's platform. The Figma Make tool allows people to type in a few words and have AI models from Anthropic and Google.

Figma Stock Falls Thursday As Google Expands AI Design Push - Figma (NYSE:FIG)

Figma shares are sliding. Why is FIG stock falling? Google AI Studio Roadmap Raises Fresh Questions For Figma Stock In a post on X, Logan Kilpatrick said Google's AI Studio roadmap for the coming weeks includes design mode, Figma integration, Google Workspace integration, better GitHub support, planning mode, immersive UI, agents, multiple chats per app, simplified deploys and G1 support. That update adds to concerns sparked by Google Labs' revamped Stitch platform, which was recently repositioned as an AI-native design and prototyping tool aimed at turning natural-language prompts into high-fidelity interfaces. Stitch's feature set, including voice-driven design, agent-style workflows and developer-tool exports, overlaps with core areas where Figma has built its franchise among designers and product teams. Why Investors Are Watching FIG Stock The roadmap post may not be directly about Figma itself, but the mention of deeper design tooling and Figma integration highlights how quickly large platform players are expanding around the digital product design stack. For investors, that keeps the spotlight on whether Figma can defend its position as AI-native design tools proliferate, even as the company remains a widely used collaborative platform for interface design and prototyping. What FIG Stock's RSI Says About Recent Momentum Figma's RSI has mostly stayed in the neutral range over the past year, with brief spikes into overbought territory above 70 and several dips into oversold levels below 30. Recently, the RSI has rebounded from oversold conditions and is trending back toward the mid-range, suggesting stabilizing momentum after prior weakness. What Analysts Are Saying About FIG Stock Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $33.40. Recent analyst moves include: RBC Capital: Sector Perform (Lowers Target to $31.00) (Feb. 19) Stifel: Hold (Lowers Target to $30.00) (Feb. 19) Wells Fargo: Overweight (Lowers Target to $42.00) (Feb. 19) FIG Shares Drop Thursday Afternoon FIG Price Action: Figma shares were down 1.58% at $24.86 at the time of publication on Thursday. The stock is near its 52-week low of $18.41, according to Benzinga Pro data. Image: Shutterstock This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.