Morgan Stanley Cuts Figma Price Target Despite 46% Revenue Growth: Is AI Competition the Risk?

Morgan Stanley lowered its terms people connected Figma (NYSE:FIG) to $38 from $44, maintaining an Equal Weight standing pursuing the plan bundle maker's first-quarter results. The terms people chopped arrives contempt a 2nd consecutive 4th of accelerating gross maturation to 46% twelvemonth implicit year, highlighting an antithetic hostility successful the expert community.

Piper Sandler expert Billy Fitzsimmons besides trimmed his people to $30 from $35 portion keeping an Overweight rating. For investors successful Figma stock, the connection is nuanced: maturation is excellent, yet the AI contention statement is compressing the aggregate Wall Street volition wage for it.

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The Analyst's Case

Morgan Stanley credited the accelerating apical enactment to spot expansion, paid lawsuit conversion, and caller recognition monetization. The steadfast noted that portion capitalist debates connected contention and gross margins persist, the Q1 2026 results "provide a beardown lawsuit for Figma's positioning successful AI."

Piper Sandler's information points were likewise strong: Figma's 6% gross beat, nett dollar retention of 139%, and a Q2 gross maturation guidance midpoint of 40% twelvemonth implicit year, a sizable 9 points up of consensus. Management besides raised the FY26 gross maturation midpoint to 35% twelvemonth implicit year.

Company Snapshot

Figma operates a collaborative plan level utilized by merchandise teams crossed enterprises. The institution carries a marketplace capitalization of astir $9.98 cardinal and generated trailing gross of $1.06 billion, with gross margins astir 85%.

FIG shares past traded astatine $23, good beneath the 52-week precocious of $142.92. The statement expert people sits astatine $40.25, with ratings skewing toward Hold.

Why the Move Matters Now

The valuation reset reflects a structural interest astir class disruption alternatively than immoderate execution miss successful the quarter. So-called "vibe coding" platforms and AI-generated idiosyncratic interface tools are progressively susceptible of producing plan assets without accepted workflows. That has investors questioning whether the plan instrumentality class itself faces disruption.