Shares of Figma Inc. traded higher in premarket activity Wednesday after Citi initiated coverage with a Buy rating and a $36 price target. The stock has been under significant pressure in 2026, falling 52% year-to-date amid investor concerns about the impact of artificial intelligence on the design-software market.
Analyst Tyler Radke noted that recent checks indicate "strong seat upgrades & credit pack utilization," which could be key metrics for investors to monitor as Figma pushes AI features into its paid product lineup. The company's first-quarter revenue surged 46% year-over-year to $333.4 million, and management raised its full-year revenue guidance to a range of $1.422 billion to $1.428 billion.
CEO Dylan Field emphasized that design is "the competitive edge," while CFO Praveer Melwani pointed to "early traction on AI monetization." Figma's approach to AI monetization includes credit packs that customers use when running AI features, a model that could help offset potential pressure on traditional per-seat pricing if AI enables fewer users to accomplish more work.
Investors are closely watching Figma as a bellwether for how AI might reshape subscription software economics. The company faces competition from industry heavyweights Adobe Inc. and privately held Canva, both of which are rolling out new AI capabilities. Reuters reported last week that Canva and Figma are narrowing the gap with Adobe by introducing innovative AI tools.
Figma's annual user conference, Config 2026, is scheduled for June 24 in San Francisco. The company expects over 10,000 attendees, including designers, developers, and product builders. Management is expected to provide updates on AI product rollouts, credit adoption, and the broader product roadmap during the event.
Despite the positive analyst note, risks remain. In its latest quarterly filing, Figma disclosed that it implemented AI credit caps in March and introduced monthly add-ons and pay-as-you-go options. The company also flagged potential customer pushback if the AI credit system is perceived as confusing, unstable, or unfair. Additionally, Figma cited reputational, legal, competitive, and regulatory risks associated with AI.
The broader market context shows the S&P 500 has gained 9.7% year-to-date, highlighting the divergence in Figma's performance. Citi's initiation shifts the debate from whether AI will disrupt design jobs to whether Figma can capture AI-driven design workloads on its platform and monetize them effectively.
