Figma gets neutral rating from Wall Street despite AI potential

Figma received neutral ratings from major Wall Street brokerages as coverage began following its New York Stock Exchange debut last month.

The design software maker’s shares more than doubled to US$85 on its first day, compared to its IPO price of US$33, but were trading down nearly 1% at US$76.6 in premarket activity on August 25, 2025.

Figma, which makes collaborative design tools for building websites and digital products, now has a market value of US$37.7 billion, significantly higher than the US$20 billion valuation from its terminated Adobe buyout in December 2023.

JP Morgan, RBC Capital Markets, and Morgan Stanley all initiated coverage with “hold” or equivalent ratings, citing the company’s high valuation and tough competition, especially from AI-driven products.

Figma has warned that rapid AI adoption could threaten its market share.

Brokerage price targets ranged from US$65 to US$85 per share.

Figma’s customers include Netflix, Airbnb, and Duolingo.

🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ Public market valuations can exceed strategic acquisition premiums for high-growth companies

Figma’s current market capitalization of $37.68 billion significantly exceeds the $20 billion Adobe offered to acquire the company in December 2022 2 1.

This premium suggests public investors are willing to pay more for growth potential than even strategic acquirers who could realize immediate synergies.

The disconnect becomes more striking when considering Adobe’s original offer represented roughly 50 times Figma’s revenue at the time, already reflecting a substantial premium 2.

Wall Street analysts now describe Figma’s valuation as “pricing in a long runway for growth,” with Morgan Stanley specifically noting the “market-leading multiple” limits near-term upside potential 1.

This trend reflects how public markets sometimes assign higher valuations to fast-growing software companies than strategic buyers, who must justify acquisitions based on concrete integration benefits and cost synergies.