Figma Stock Plunges 26.2% on AI Jitters, Mixed Earnings, Insider Selling

The share price dropped to a record low today, with an intraday decline of 11.01% so far this month. Figma’s stock continued its downward spiral, closing at $26.89 after hitting a session low of $26.86, marking a 26.2% drop over 30 days and a 24.3% fall year-to-date. Analysts attributed the selloff to sector-wide jitters over AI-driven disruption, mixed earnings guidance, and insider selling.

Key factors driving the decline include growing concerns about AI’s impact on design tools, which threaten Figma’s core business model. Analysts from Wells Fargo and Goldman Sachs revised price targets downward, while insider sales by executives like Brendan Mulligan and Shaunt Voskanian signaled waning confidence. Despite revenue growth of 38% in the November quarter, Figma’s negative net margin and stretched valuation—trading at a 14.56x price-to-sales ratio—highlighted unresolved profitability challenges.

The broader software sector faced headwinds as investors reevaluated high-growth SaaS stocks amid AI competition. Figma’s 80% drop from its post-IPO peak underscored its vulnerability, despite institutional buying by entities like the Teachers Retirement System of Kentucky. With Q4 2025 earnings due in late February, the company must address AI risks and demonstrate a clearer path to profitability to stabilize its stock. For now, the sell-off reflects a market recalibration to evolving technological and financial realities.