Figma Stock Soars 250% in Blockbuster IPO – Is FIG a Buy Now?

By the end of its first trading day, Figma (FIG) looked less like a software company and more like a rocket ship.

When the cloud-based design platform made its long-awaited debut on the New York Stock Exchange on July 31, its shares exploded out of the gate, rising a jaw-dropping 250% from the IPO price.

It was one of the most dramatic stock market debuts in years, and it came with a loud message: Wall Street's appetite for fast-growing tech companies is back.

But after such a monstrous move, are shares a buy today?

Let's have a look...

What Makes Figma Essential Design Software for Teams

Founded in 2012, Figma lets teams design apps and websites together in real time. You can think of it as the "Google Docs of design."

Designers, engineers, and product managers can collaborate simultaneously on the same file from anywhere in the world – all in a web browser or desktop app.

With more than 13 million monthly users, including tech heavyweights like Alphabet (GOOGL), Microsoft (MSFT), Netflix (NFLX), and Uber (UBER), the platform has become essential to modern software development.

More than 95% of Fortune 500 companies now use Figma. And those customers aren't just sticking around... they're spending more each year. The company's "net dollar retention" rate, which tracks how much current users increase their spending over time, sits at a remarkable 132%.

That kind of loyalty doesn't go unnoticed on Wall Street. ARK Investment Management's Cathie Wood – a fund manager known for her boom-and-bust record of investing in disruptive, innovative companies – wasted no time buying up 60,000 shares, a stake worth about $5.4 million at yesterday's closing price.

Figma's road to an IPO almost looked very different. In September 2022, design giant Adobe (ADBE) announced plans to acquire Figma for $20 billion.

The move raised eyebrows in the design world. Critics feared Figma would lose its independent edge, and European and U.S. regulators took notice. The deal fell apart by the end of 2023, with Adobe paying Figma a $1 billion breakup fee. At the time, it looked like a lost opportunity.

Now, it may be a blessing in disguise.

Figma marched forward on its own, investing heavily in new features and expanding its footprint. Analysts at Yahoo Finance point to the company's recent push into artificial intelligence, including tools that can automatically generate website layouts and design ideas, as a potential growth catalyst.

Figma's IPO Headlines a Resurgent Tech IPO Market

While Figma's debut is a victory for the company and its early investors, it also suggests a turning point for the broader IPO market.

After years of silence, the IPO calendar has roared back to life in 2025. So far this year, 205 companies have gone public in the U.S., an 81% increase over the same period last year. More than $31 billion was raised in the first half alone, the busiest first-half total in four years.

Other big names like stablecoin platform Circle Internet (CRCL), digital bank Chime Financial (CHYM), and AI cloud-computing company CoreWeave (CRWV) have also gone public this year.

But Figma's IPO was the crown jewel, becoming the largest venture-backed tech IPO since 2021.

Originally priced at $33 per share, Figma was valued at a hair less than $20 billion. But when shares became available to trade, they more than tripled to close at $115.50 on the first day of trading, its valuation soaring to $60 billion – nearly triple Adobe's buyout offer from a few years ago.

But volatility works in both directions. By the end of its first week of trading, Figma's stock had drifted back to around $88 per share, putting its valuation closer to $45 billion.

The swift 24% drop isn't unusual for notoriously volatile IPOs in their earliest day of trading as investors struggle to figure out what the company is really worth.

So... is it worth buying today?

Should You Buy Figma Stock Now? Bull and Bear Cases Explained

Figma has a lot going for it.

Revenue was up 46% in the first quarter of 2025 compared with the same period in 2024. That's impressive by any standard, and especially rare among already profitable software companies.

And yes, Figma is profitable. In Q1, the company posted a 17.4% operating margin, a strong showing for a SaaS business. Even more impressive: its gross profit margin – a measure of how efficiently it delivers its services – was a whopping 91%. That's higher than Adobe's 89%, and it signals that Figma not only sells a valuable product, but it does so with impressive efficiency.

With a huge and loyal customer base, steady growth, strong margins, and a brand that has become nearly synonymous with digital product design, it's no wonder investors are lining up.

And as we mentioned above, Figma is taking advantage of artificial intelligence. The company is automating design suggestions and content generation. If successful, these pushes could expand Figma's total addressable market and increase its revenue per user.

But don't ignore its risks...

Despite its strengths, Figma's stock trades at a nosebleed valuation. One common way to measure a company's valuation is the price-to-earnings (P/E) ratio. A high P/E ratio means investors are paying a lot for each dollar of earnings, often because they expect rapid growth in the future.

Right now, Figma is trading at 300 times earnings. Said another way, investors are paying $300 for every $1 of annual profit. For context, the average S&P 500 company trades at a P/E of around 25. Figma's current valuation means the company is essentially priced for perfection and leaves little room for error.

There's also the matter of supply and demand. Figma offered everyday investors just 43 million shares in its IPO. That represents roughly 10% of the total shares outstanding.

With more than 400 million Class A shares in existence, a flood of supply could hit the market when the "lock-up period" ends in January 2026. That's when insiders and early investors will be free to sell their shares.

If many of them decide to cash out, it could push the stock price down, regardless of how the business is doing.

Finally, Figma is still new to public markets. It has yet to prove that it can consistently deliver strong results under the scrutiny of Wall Street. One or two weak quarters could quickly change investor sentiment.

Why Patient, Long-Term Investors May Be Rewarded

Jumping in at today's price may be risky, especially given Figma's sky-high valuation and the possibility of a flood of shares hitting the market early next year.

But long-term investors should keep a close eye on the stock. Waiting until Figma reports a couple of solid quarters as a public company will give investors more clarity on its financial health and help avoid the wild swings that often follow hot IPOs.

A pullback after the lock-up period could provide a more attractive entry point for those willing to be patient.

In the end, Figma's IPO was confirmation that, after years of uncertainty, investors are once again embracing innovation and growth. The company now faces the real test of delivering on sky-high expectations.

With its strong fundamentals, loyal customer base, and leadership in the design software space, Figma may well become one of the defining tech companies of this decade.

But for now, with the stock still finding its footing, the smartest move might be to watch from the sidelines.