Figma (FIG) Surges 5.42% on Earnings Optimism and AI-Driven Bets – What’s Fueling the Rally?

Summary
• Figma’s stock (FIG) surges 5.19% to $38.91, breaking above its 30-day moving average of $38.15
• Intraday range of $37.44–$38.98 reflects aggressive buying amid a 38% YoY revenue growth highlighted in Q3 earnings
• Options volume spikes 300% in at-the-money call options (e.g., FIG20251226C38) as volatility jumps to 40.51%
• Analysts remain split: 3 buy ratings vs. 7 holds, but a $62.86 price target implies 78% upside potential

Figma’s sharp rebound on Thursday has ignited a debate among traders and analysts. The stock’s 5.19% gain—its largest intraday move since the July IPO—comes amid mixed fundamentals: while Q3 revenue growth of 38% and a raised full-year guidance buoy optimism, a forward P/E of 90 and a -14.12 dynamic PE ratio highlight valuation risks. With options activity skewed toward bullish bets and a leveraged ETF (FIGG) surging 9.83%, the market is pricing in a potential breakout.

Q3 Earnings Outperformance and Analyst Revisions Fuel Short-Term Optimism
Figma’s 5.19% rally stems from a combination of Q3 earnings outperformance and analyst upgrades. The company reported $0.10 EPS, beating estimates of -$1.56, while revenue rose 38% YoY to $2.4B. This outperformance, coupled with a raised full-year guidance, has reignited interest in the stock. Analysts at Motley Fool upgraded FIG to 'Hold' with a $62.86 price target, citing Figma’s 95% Fortune 500 adoption rate and improving margins. However, the stock remains 69% below its $142.92 52-week high, reflecting lingering concerns about its unprofitable model and high valuation. The recent insider selling (e.g., CAO Tyler Herb’s $108K in shares) adds caution, but the market is clearly betting on a near-term rebound.

Application Software Sector Volatility: Adobe (ADBE) Trails Figma’s Gains
Figma’s 5.19% move outpaces its sector leader Adobe (ADBE), which rose 0.21% on Thursday. The Application Software sector, typically driven by SaaS growth and AI integration, has seen mixed performance in 2025. While Adobe’s stable margins and recurring revenue model provide downside protection, Figma’s high-growth, high-risk profile has attracted speculative buyers. The sector’s 83rd percentile MarketRank score suggests strong analyst interest, but Figma’s -14.12 dynamic PE ratio and 3.07% short interest highlight its divergence from more mature peers.

Bullish Call Options and ETF Leverage: Navigating Figma’s Volatility
• 30-day MA: $38.15 (below current price)
• RSI: 54.0 (neutral)
• MACD: -1.85 (bearish) vs. signal line -2.41
• Bollinger Bands: Upper $39.71, Middle $36.62, Lower $33.53
• Short-term trend: Kline pattern indicates bearish bias, but recent volume spikes suggest reversal

Top Options Picks:
• FIG20251226C38 - Type: Call, Strike: $38, Expiry: 2025-12-26, IV: 40.51% (moderate), LVR: 24.88%, Delta: 0.6928 (high sensitivity), Theta: -0.1827 (rapid time decay), Gamma: 0.149998 (high sensitivity), Turnover: 8,278 (liquid), Payoff at 5% upside ($40.85): $2.85/share (24.88% return on strike price). Why it stands out: High gamma and delta make it ideal for a short-term rally, while moderate IV ensures cost efficiency.
• FIG20251226C39.5 - Type: Call, Strike: $39.5, Expiry: 2025-12-26, IV: 41.35% (moderate), LVR: 50.73%, Delta: 0.4453 (balanced sensitivity), Theta: -0.1447 (moderate decay), Gamma: 0.165281 (high sensitivity), Turnover: 2,896 (liquid), Payoff at 5% upside ($40.85): $1.35/share (50.73% return on strike price). Why it stands out: High leverage ratio and gamma make it a high-reward bet for a breakout above $39.50.
ETF Angle: The Leverage Shares 2X Long FIG Daily ETF (FIGG) surged 9.83%, amplifying Figma’s 5.19% move. Traders bullish on a sustained rally should monitor the 30-day MA ($38.15) and 52-week low ($32.83). A break above $39.50 could trigger a test of the 200-day MA (if data becomes available) and validate the $62.86 analyst target.

Backtest Figma Stock Performance
Figma's (FIG) stock performance following a 5% intraday surge from 2022 to the present exhibits significant volatility and mixed results. Here's a detailed analysis:1. Earnings and Valuation Concerns: Figma's stock experienced a notable drop of 39% in August 2025 after a 300% surge during its IPO in July 2025. The Q2 2025 earnings report revealed a $0.15 EPS miss, highlighting a disconnect between market expectations and actual performance. The company's high-growth, high-risk profile, driven by speculative bets on AI-driven design adoption, has attracted investors despite its stretched valuation metrics, such as a P/E ratio of 92.11, which is significantly higher than Adobe's more modest P/S ratio of 6.93.2. Market Dynamics and Insider Activity: The stock's performance has been influenced by insider selling, with a notable $795 million in sales post-lockup period, which could indicate market skepticism about the company's long-term prospects. Additionally, the recent acquisition of Weavy is likely to impact margins and operating expenses, potentially leading to a further deterioration in adjusted gross margins and adjusted free cash flow margins.3. Technical Analysis and Volatility: Figma's stock has shown significant volatility, with a recent 5.19% surge that broke above its 30-day moving average. Options volume has spiked significantly, reflecting heightened investor activity and sentiment around the stock. The stock's intraday range of $37.44–$38.98 indicates aggressive buying, but the sustainability of this momentum remains uncertain.4. Sector Performance and Growth Prospects: Within the Application Software sector, Figma's performance has been mixed, with Adobe providing more stable margins and a more predictable revenue model. While Figma's growth potential, driven by AI integration, is attractive, its valuation risks and recent earnings performance suggest caution for investors.In conclusion, while Figma's stock has shown potential for growth, particularly in AI-driven design adoption, its performance following a 5% intraday surge from 2022 to the present is tempered by significant volatility, valuation concerns, and mixed earnings results. Investors should exercise caution, considering both the potential upside and the risks associated with Figma's high-growth, high-risk profile.

Figma’s Rally: A Tactical Buy or a Cautionary Bet?
Figma’s 5.19% surge reflects a mix of optimism and caution. While Q3 earnings outperformance and analyst upgrades justify short-term bullish bets, the stock’s -14.12 dynamic PE ratio and 3.07% short interest underscore its speculative nature. Traders should focus on key levels: a close above $39.50 could validate the $62.86 price target, while a retest of the 30-day MA ($38.15) may trigger profit-taking. The sector leader Adobe (ADBE) rose 0.21%, suggesting broader SaaS resilience. Action: Buy FIG20251226C38 for a 5-day rally or use FIGG for leveraged exposure, but set tight stops below $37.44.