Figma Stock Down 52% in 2026 but Citi Sees AI as a Tailwind, not a Threat
Mondeum Capital (UK) Limited
Figma has struggled in 2026, with its stock falling 52% while the S&P 500 has risen almost 10% since Figma’s IPO. Many investors worry that AI could hurt demand for design software by making it easier and faster to create prototypes. However, Citi Research disagrees. They have started coverage with a Buy rating and a $36 price target. Here’s why Citi thinks the concerns about AI disrupting Figma may be overstated.
Citi’s analyst recognized the real risks. Generative AI is making it less clear who counts as a designer, which could mean fewer paid seats for Figma’s pricing model. Still, the analyst believes that as design tools become easier to use, structured workflows will matter even more. Figma could become the main platform that helps organize these workflows as more people across companies get involved in design.
Citi’s positive outlook is based on both Figma’s potential to reach more of the market and its ability to defend its product. Figma currently holds about 4% of what Citi sees as a $25 billion market in 2025. Competitors like Canva and Adobe already serve wider creative and professional groups that Figma hasn’t tapped yet. By 2029, this market could double as Figma adds new products and AI attracts users who aren’t as technically skilled as its original customers.
Early signs from Figma’s AI features are promising. Citi pointed out that users are engaging with these tools, even though there is skepticism in the industry. The company has also managed to perform well despite tough conditions for IT spending.
On Wednesday, Figma’s shares rose 5.3% to $18.90. Citi’s $36 price target suggests the stock could nearly double from here.
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