Figma (FIG +2.50%) is riding a roller coaster in 2026. After a 30.6% price drop in January and a 13.4% gain in February, the digital design and collaboration expert posted a 28.1% drawdown in March, according to data from S&P Global Market Intelligence.
There wasn't a big, splashy bombshell event to explain Figma's weakness last month. Instead, it looks like a combination of seemingly modest factors. It's risky to own a richly valued software stock in times of unpredictable economic signals, broad investor skepticism of traditional and cloud-based software businesses, and the rise of direct competition from artificial intelligence (AI) tools.
NYSE: FIG
Key Data Points
What weighed on Figma in March
Figma didn't have a disaster in March. No earnings miss, no executive departure, no product recall. The stock just leaked lower, day after day, like a slow tire puncture on a long road trip.
The broader software sector faced headwinds last month. Enterprise spending on traditional software-as-a-service (SaaS) tools has come under scrutiny as companies explore whether AI can replace some of those workflows. Yes, "traditional SaaS" is a thing nowadays. Figma's core product (collaborative design software) sits squarely in that zone. Generative AI tools from Adobe (ADBE +1.89%) and a growing list of start-ups now offer features that overlap with Figma's platform, making the stock vulnerable to AI disruption concerns.
Then there's the valuation question. Figma came public at a premium price, and the stock has spent much of 2026 searching for a floor. The broader market got wobbly in late March. Oil prices spiked, inflation fears returned, and geopolitical headlines dominated the news wires. As a result, Figma and other richly valued growth stocks took the brunt of the selling.
The biggest single-day drop came on March 27, when Figma fell 6.2% alongside a broader growth-stock rout. But most of the month's damage came in smaller increments. No dramatic headlines, just steady erosion.
Sometimes that's how 28% disappears, step by step.
Image source: Getty Images.
Where Figma goes from here
Figma is a fantastic business attached to a very uncomfortable stock chart. The company has crossed into positive cash flow territory and maintains a strong balance sheet, giving CEO Dylan Field room to invest through the AI transition rather than scrambling for short-term fixes.
The risks are real. AI tools are advancing rapidly, and no moat is safe. The stock trades at roughly 13 times sales for a company that isn't profitable yet. Even after losing 28% in March, this isn't a value stock by any stretch.
Figma doesn't need to win every quarter to reward patient shareholders, though. If Field navigates the AI transition the way he navigated the shift to browser-based design, the company could be generating serious free cash flow by 2030. That's a big "if," but it's not a blind bet. It's backed by a decade of top-notch execution.
Figma's volatility can be painful, and there's no telling where the stock might go next month or this year. For investors who believe in Field's vision and can stomach the sudden price swings, turning off the ticker's news feed to check back in a few years might be the right move.
