Figma’s AI Transformation Faces Market Skepticism Despite Strong Earnings

Figma's latest quarterly results present investors with a puzzling scenario. The design software company delivered impressive financial performance that exceeded expectations, yet its shares continue to hover near annual lows. This divergence between fundamental strength and market performance highlights the critical test facing Figma's artificial intelligence initiatives.

The company's third quarter 2025 earnings report revealed a surprising profit of $0.10 per share, dramatically outperforming analyst expectations of a $1.58 per share loss. Revenue climbed to $274.2 million, significantly surpassing the $263.9 million forecast.

Despite these positive results, market reaction remained tepid. Following brief after-hours gains, Figma shares declined 3.76 percent by Friday's close, settling at $44.25—concerningly close to the 52-week low of $43.00.

Artificial Intelligence Driving Business Momentum

Figma's accelerated AI strategy appears to be yielding tangible benefits. The company has transformed its business model through tools like Figma Make, while its partnership with Google Cloud has delivered concrete improvements, including a 50 percent speed increase for the "Make Image" function.

Should investors sell immediately? Or is it worth buying Figma?

Key performance indicators demonstrate the strategy's effectiveness:
* Annual revenue has surpassed $1 billion for the first time
* Paying customers reached 540,000—an increase of 90,000 since the first quarter
* Seventy percent of clients use at least three products
* Large customers show a Net Dollar Retention Rate of 131 percent

Analyst Caution Persists Amid Growth

Market experts maintain cautious positions despite the strong fundamentals. Most research firms sustain "Hold" ratings, though price targets range between $62.86 and $67.63—representing potential gains exceeding 40 percent from current levels.

While Goldman Sachs raised its target price to $54, Piper Sandler and JP Morgan reduced their expectations. This skepticism finds support in recent insider activity, with company executives selling shares worth over $4.8 million in early November.

The critical question remains whether Figma's AI offensive can reverse the downward trend. Fourth-quarter revenue projections of $292-294 million indicate continued growth, but the stock must overcome technical resistance levels before investors can confidently declare a genuine trend reversal.