Artificial intelligence (AI) is transforming many industries, including the software sector. According to Goldman Sachs, "(C)omputing is evolving from static, hard-coded logic to outcome-based assistants." This new paradigm sees software taking action to help users achieve their goals.
One field where AI is expected to deliver drastic change is design software. Two companies in the crosshairs are Figma (FIG 4.63%) and Adobe (ADBE 1.44%). The former is a newly public company that had its initial public offering (IPO) to much fanfare last July. The latter is an industry veteran that was set to acquire Figma a few years ago until European regulators sank the deal over antitrust concerns.
AI can either help these companies succeed, or AI's ability to create impressive visuals with merely a prompt could threaten their businesses. To evaluate the situation and decide which is a better investment, here's a closer look at Adobe's and Figma's approaches to AI.
Image source: Getty Images.
Adobe's AI adoption
Can artificial intelligence make Adobe's design software irrelevant? It's too early to tell, but the possibility exists now that AI lets anyone easily create images, videos, and other content without the need for separate software. This was enough to rattle Wall Street's confidence in the company's economic moat, contributing to a share price drop of more than 30% during the past 12 months.
For Adobe, the path forward is centered on folding AI into its offerings in a way that's compelling to customers. To that end, the company is pursuing several avenues to weave AI into its software stack.
This includes integrating with more than 25 different AI models, as well as launching the company's proprietary AI platform, Firefly, which was built with Adobe-owned images, along with public domain and openly licensed content to avoid copyright issues. Firefly delivers AI across Adobe's software suite, including Photoshop and Illustrator.
NASDAQ: ADBE
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The AI capabilities helped the company drive up monthly active users by 15% year over year in its 2025 fiscal year, ended Nov. 28. As further proof of its success blending artificial intelligence into its solutions, management highlighted the fourth quarter's record number of customer bookings worth more than $1 million, and more than 25% year-over-year growth in customers spending at least $10 million in annual recurring revenue (ARR).
These results helped Adobe achieve record fiscal fourth-quarter revenue of $6.2 billion, up from $5.6 billion in the previous year. Its profits rose as well, with Q4 net income increasing to $1.9 billion from the prior year's $1.7 billion.
How Figma employs AI
Figma is aggressively pursuing a path to make AI an essential tool in the design industry. One way it's doing this is with the recent acquisition of start-up Weavy.
Weavy's tech brings together several AI models into a single interface, letting users apply the ones that work best for a task. It also layers on design tools that enable the user to refine AI's output. Combined, these features grant users the ability to collaborate with AI, going back and forth quickly to revise designs.
Along with the Weavy acquisition, Figma built its own AI tools, notably Figma Make. According to management, 30% of customers spending at least $100,000 in ARR use Figma Make weekly, with that usage increasing.
NYSE: FIG
Key Data Points
And the company partnered with OpenAI to bring its software into ChatGPT. Users enter prompts in ChatGPT to quickly generate diagrams, flowcharts, and presentations. This partnership extends Figma's reach and opens a channel through which to acquire more customers.
Figma's ability to attract and retain customers is driving sales growth. The software company reached record revenue of $274.2 million in the third quarter, representing a 38% year-over-year increase.
However, Figma wasn't profitable in the third quarter. It posted a net loss of $1.1 billion due to stock-based compensation related to its IPO.
Choosing between Figma and Adobe stocks
Figma's strong sales growth suggests it has successfully integrated AI into its software products so far. This is an appealing reason to consider buying its stock.
However, Adobe is also doing well. Wall Street's concerns over AI eroding its business haven't come to pass, based on fourth-quarter results that beat the average of analyst forecasts.
Another factor to consider in choosing between Adobe and Figma is share price valuation. Despite its stock price falling during the past several months, Figma's valuation remains elevated, as evidenced by its price-to-sales ratio (P/S).
Data by YCharts.
The chart shows Figma's sales multiple is almost triple Adobe's, even though it has dropped significantly since its IPO. Moreover, Adobe's P/S sank during the past year, and given that the company continues to deliver excellent financial performance, the stock appears attractively valued.
Adobe's solid financials are a testament to the success of its AI efforts. Combined with its appealing valuation, it is the superior software stock to buy over Figma.
