Figma Inc. (FIG) Stock Plunges 15.96% as Institutional Reallocation Spurs Tech Sector Caution

Figma Inc.’s (FIG) stock fell to a record low this month, with an intraday decline of 5.11% on Nov. 18, marking its fourth consecutive day of losses. The shares have dropped 15.96% over the past four trading days, reaching an intraday low not seen since the beginning of the month. The selloff reflects a broader shift in institutional investment strategies and heightened caution in the tech sector.

The recent price action follows institutional portfolio reallocation led by the Baron Fifth Avenue Growth Fund, which added Figma to its holdings during Q3 2025 while exiting positions in GitLab and Mobileye. The fund’s decision to divest from the two technology companies, coupled with its subpar 5.7% quarterly return compared to the Russell 1000 Growth Index’s 10.5%, highlights a strategic shift toward assets with more predictable growth trajectories. Figma’s recurring revenue model and dominant position in the design software market made it an attractive target for capital reallocation amid broader market volatility.

The fund’s underperformance underscores the challenges faced by growth-oriented portfolios in a high-interest-rate environment. By shifting capital to Figma, the fund appears to prioritize companies with defensible market positions and scalable business models, such as Figma’s cloud-based design platform. However, the stock’s recent weakness suggests that institutional confidence may be waning, particularly as macroeconomic uncertainties persist and investors remain cautious about high-growth tech equities.