Figma and Morgan Stanley's Top IPO Picks for 2025

Morgan Stanley recommends one of two new IPOs as a Buy. Figma, a pure-play tech company offering a suite of tools for digital product creation, has a broad functionality that has driven rapid adoption. The platform supports every step of digital creation, from concept sketching to final coding, and counts over 13 million monthly active users and 450,000 paying customers.

Morgan Stanley has initiated coverage on two recent IPOs, Figma and Shoulder Innovations, with a notable recommendation for Figma. The tech company, which offers a suite of tools for digital product creation, has seen rapid adoption and a strong market debut.

Figma, founded in 2012, has matured into a fully connected AI-powered platform that supports every step of digital creation, from concept sketching to final coding. The company boasts over 13 million monthly active users and approximately 450,000 paying customers, with high-profile clients such as Duolingo, The New York Times, Zoom, Atlassian, and Dropbox. Figma's IPO, which raised $1.22 billion, saw its shares close at $115 on day one before pulling back to the $70s, where they currently trade.

Morgan Stanley analyst Elizabeth Porter has assigned Figma an Equal Weight rating with an $80 price target, suggesting a 14% upside potential. Porter highlights Figma's effective use of generative AI but notes that the stock's high valuation presents a negative for investors. She views Figma as a market-leading platform but cautions that its valuation at a market-leading multiple prices a long runway for growth, limiting the near-term risk/reward [1].

Figma has received 7 analyst reviews to date, with a Moderate Buy consensus rating. The stock is currently trading at $70.28 against an average price target of $75, indicating a potential 7% upside from current levels [1].

In contrast, Shoulder Innovations, a medical technology company focused on bringing new implant devices to the field of surgical shoulder repair, has been assigned an Overweight (Buy) rating by Morgan Stanley analyst Patrick Wood. The company's InSet Glenoid technology is designed to counteract the 'rocking horse' forces put on the shoulder joint by the natural rotational movements of the humerus. Wood points to the strength of the company's core implant technology and the broader growth potential as reasons for optimism. Shoulder Innovations has received 3 positive analyst reviews, making the Strong Buy consensus rating unanimous [2].

In summary, Morgan Stanley has recommended Figma as a Buy among the recent IPOs, citing its market-leading platform and potential for AI-driven growth. However, the stock's high valuation presents a negative for investors. Shoulder Innovations, on the other hand, has been assigned an Overweight rating, reflecting the company's differentiated product line and strong growth potential.

References:

[1] https://www.tipranks.com/news/2-new-ipos-on-the-street-morgan-stanley-chooses-the-superior-stock-to-buy
[2] https://www.ainvest.com/news/morgan-stanley-initiates-equal-weight-coverage-figma-80-pt-2508/