On Tuesday, Bank of America (BofA) reinstated its coverage of Figma (FIG), issuing a Buy rating and setting a price target of $30. This decision led to a roughly 5% increase in Figma's stock during pre-market trading.

Analyst Tal Liani emphasized that artificial intelligence (AI) serves as a beneficial factor for Figma, predicting that it will expand the user base instead of threatening the platform's relevance. This perspective reflects a significant shift from the previous sentiment that the rise of AI could diminish Figma's core value.

Significance of the Upgrade

The positive outlook from BofA is indicative of a broader recovery for Figma, which had previously experienced an approximate 85% decline from its 52-week high. Key points include:

  • Current stock price: around $22.51, up from a 52-week low of $16.60.
  • 75% of enterprise customers purchased additional AI credits in Q1 2026 after reaching their initial usage limits.
  • Annual recurring revenue from customers exceeding $100k grew 48% year-over-year.
  • Net dollar retention rate is reported at 139%, with paid-user growth at 54%.

These metrics reinforce BofA's confidence in Figma's pricing strategies, which appear to successfully harness the growing demand for collaborative design tools among enterprises.

Market and Competitive Context

Citigroup and Goldman Sachs have also adopted bullish positions on Figma, with price targets of $36 and $30, respectively. This brings the total number of major Wall Street firms endorsing Figma to three, a notable change from previous bearish sentiments that drove the stock down.

Additionally, three Form 4 insider filings submitted on July 6 indicate increased ownership activity among company insiders, suggesting renewed confidence in Figma's prospects.

Despite broader market challenges, including a 0.9% drop in Nasdaq 100 Futures on Tuesday, Figma's increased valuation signals a recovery that began prior to the BofA announcement, partially driven by its inclusion in major Russell indexes during the June reconstitution.

Future Developments to Monitor

Investors and analysts will be closely monitoring Figma’s stock performance following this recent positive coverage, as well as upcoming quarterly earnings reports to assess the effectiveness of AI monetization strategies.

This material is for informational purposes only and is not financial advice.