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Fears of AI disruption have made software stocks very unpopular right now.
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Figma continues to decline, but the company could grow its revenue by 50% over the next few years.
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That could deliver some impressive returns from the stock’s current valuation.
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10 stocks we like better than Figma ›
figure (NYSE: FIG) It was a hot stock when it went public in the summer of 2025. But after initially skyrocketing, the stock has been on a long decline. Figma is now more than 75% from its all-time high, stomach-churning results for most who bought the stock at some point.
Given how quickly Figma went from hot to cold on Wall Street, the enterprise software company might be one of the most underrated names on the market right now.
Here’s why writing off Figma stock by 2026 could be a big mistake.
Figma is not alone in her dire circumstances. The market has turned its back on almost all software stocks. There seems to be an overwhelming feeling right now that artificial intelligence (AI) will make many software applications obsolete. Time will tell, but as with the Internet in the late 1990s, sentiment is often many years ahead of the real-world impact of a new technology.
It seems unlikely that entrenched software products will disappear overnight or anytime soon. People can create almost any website, product, or digital interface on Figma, even collaborating in real time with others using its multiplayer technology. It uses AI functions and third-party AI applications, such as OpenAI’s ChatGPT. If anything, Figma is a new age software company.
Figma’s financials support the narrative here. The company is approaching $1 billion in revenue over the past 12 months, and analysts expect that to rise to nearly $1.3 billion this year and more than $1.5 billion next year. The company also boasts an impressive 131% revenue retention rate, indicating that Figma users continue to spend more as they use it over time.
Meanwhile, the stock’s continued decline has created attractive investment opportunities amid Figma’s continued growth. The stock’s price-to-sales ratio has fallen to 14, a solid valuation for a company that could grow revenue by 50% over the next two years and is already profitable enough to convert more than a quarter of its sales into free cash flow.
The stock could simply remain at its current valuation, and meeting Wall Street’s growth estimates over the next two years would likely mean outperforming the broader market. If this widespread fear of an AI-driven software armageddon dissipates, investors could easily see a rise in Figma’s valuation, further increasing the stock’s upside potential.