Figma stock falls to $16 amid AI SaaSpocalypse fears

Figma shares fell to $16 on Thursday, reducing the company’s market value to about $8.9 billion from IPO highs above $60 billion as investors sold software stocks over concerns that artificial intelligence could alter software pricing and growth.

The company reported first-quarter revenue of $334 million, up 46% year over year, and raised forward guidance. Figma forecast second-quarter revenue of $348 million to $350 million and a full-year range of $1.42 billion to $1.428 billion. Management indicated that expanding seat counts and enterprise adoption could bring profitability closer.

Figma became widely used by corporate design teams for its real-time collaboration features. Before the IPO the company reached a reported $20 billion valuation when a potential acquisition by Adobe was discussed; that deal was later terminated and Adobe paid a $1 billion breakup fee. After the IPO Figma’s market value exceeded $60 billion.

Traders and analysts point to so-called “SaaSpocalypse” concerns, where investors fear generative AI and other machine-learning tools could erode software vendors’ pricing power and growth. That sentiment has pressured several large enterprise software companies this year and has coincided with sharp valuation declines at some private fintech firms.

Technical indicators show shares near support around $16.85, aligning with an April low and forming the lower pivot of a double-bottom pattern with a neckline near $27.80. Market technicians warn that a move below $16.85 could indicate further declines before any sustained recovery.

Nvidia chief Jensen Huang has argued that AI will help incumbent software companies lower costs and add new features rather than replace them.