Shares of Figma (FIG +5.88%) were pulling back last month even as the broad market moved higher, as the narrative that the design software company would be disrupted by AI picked up steam.
Anthropic released a new product called Claude Design, sending Figma stock plunging on the news, and Anthropic's Chief Product Officer, Mike Krieger, stepped down from Figma's board soon before it announced that.
Additionally, the kerfuffle around Anthropic's Mythos AI, which was reportedly too powerful to be released to the public, also weighed on Figma and its software-as-a-service (SaaS) stock peers.
According to data from S&P Global Market Intelligence, Figma finished the month down 16%. As you can see from the chart below, the stock took three steps lower in the quarter.
What happened with Figma last month
There was little company-specific news out on Figma last month, but the pressure from Anthropic, as well as a sell-off in sympathy with ServiceNow's post-earnings decline, was enough to push the stock into the red even as the S&P 500 jumped 10.4% for the month.
The trouble started on April 8 after Anthropic announced its new Mythos AI model, which is considered powerful enough to get around conventional cybersecurity protocols. The news sent software stocks tumbling as it added to fears that AI start-ups like Anthropic would disrupt cloud software companies like Figma. The stock fell 14% over a three-day span after the Mythos news came out.
After a brief surge on April 15 as the S&P 500 topped 7,000 for the first time, Figma fell 7% after Anthropic launched Claude Design, a tool that allows users "to create polished visual work like designs, prototypes, slides," and more, similar to what Figma does.
Finally, the stock fell again the following week as software stocks plunged in response to reports from ServiceNow and IBM that weren't strong enough to correct the narrative that cloud stocks are under pressure from AI.
At ServiceNow, margin compression, in particular, seemed to spook investors.
Image source: Figma.
What's next for Figma
Figma got a bounce on May 1 as earnings reports from Atlassian and Twilio showed that the SaaS sector may be more resilient than investors thought.
Figma's first-quarter report is due out on May 14, with analysts expecting $316 million in revenue, up 38.5% from the quarter a year ago, and adjusted per-share profit of $0.06.
The report will be a big test for the stock, considering the pressure on Figma, and investors should look out for any commentary on the threat from Anthropic and Figma's plans to grow in the AI era. The stock could make a big move one way or the other when the numbers come out.
