Investors sold Figma stock amid concerns over AI competition and high valuation before its Q2 results next month.
Figma (NYSE: FIG) shares fell 16.5% this week as investors grew wary of AI-driven disruption in the software sector. The company’s premium valuation, with a forward P/E ratio of 158, leaves little margin for error in upcoming earnings.
First-quarter revenue rose 46% year-over-year to $333.4 million, but sentiment soured due to broader AI advancements. Reports of an OpenAI model autonomously hacking a website highlighted AI’s rapid evolution, fueling concerns about software incumbents.
Figma’s Q2 results are due early next month, and market caution reflects uncertainty over its ability to compete in an AI-dominated landscape.