Figma (FIG) Stock is trending after Google’s AI ‘Vibe Design’ tool update, which directly challenges Figma’s core design platform. Google Labs unveiled an AI-powered upgrade to its Stitch designing tool, introducing ‘vibe designing,’ a workflow that generates high-fidelity user interfaces from natural language, bypassing traditional wireframing. Model Context Protocol (MCP) is an open standard used to link Stitch designs directly to developer environments like Cursor and Gemini CLI. The update also includes voice-driven design, agent management, and integration with developer tools, positioning Stitch as a direct competitor to Figma in the AI-native design space.
Revenue Growth and Retention Metrics
Figma is a cloud-based collaborative design platform that is widely used by product teams and UI/UX designers to build and prototype software interfaces. Following the upgrade, Figma shares fell 7.98% during the regular session and dropped 0.24% in after-hours trading, closing at $25.26. The stock is now near its 25-week low of $18.41 and has declined 78.13% over the past year, reflecting investor concerns over the intensified direct competitive challenge from Alphabet Inc.
Despite this, Figma has shown a strong resilience in its fundamentals. In February 2026, the company reported 40% year-over-year revenue growth, which is $303.8 million in Q4 2025 (Q4-25 Earnings). This surpassed the expectations and posted a net dollar retention rate of 136%. Its AI tool, Figma Make, saw 70% quarter on quarter growth in weekly users. Additionally, the firm is expanding its AI strategy through partnerships with Anthropic and OpenAI, including a new ‘code to canvas’ feature.
Introduction of AI-Native Canvas
The update that was announced on the Google blog ships five features at once, which are an AI-native canvas, a smarter design agent, voice input, instant prototyping, and a portable design system format called DESIGN.md. Previously, you would type a prompt to get a few screens and export them to Figma or grab the HTML/CSS. While the updated version is a prompt and response model, where images, text, code, and previous designs all sit as context for the AI to work from.
Moreover, the voice control feature in Google lets you speak to the canvas, and the agent will respond in real time, make changes, and offer critiques. Alongside the Figma Design, the firm offers FigJam for whiteboard and ideation, Dev Mode for developer handoff, and Figma slides for alignment.
Earlier, Figma introduced AI credits across all seats. Starting from March this year, the firm planned to begin enforcing AI credit limits, with options for an additional credit subscription or a pay-as-you-go credit plan. The structure is built to align the pricing with usage intensity.
Monetization Opportunities Through AI Integration
Major industry player, Adobe Inc., failed to acquire Figma at $20 billion. UI/UX Design Platforms is the primary industry vertical being disrupted by the shift from manual pixel-pushing to prompt-based generation.
Figma is majorly shifting its focus to a usage-based pricing model for AI credits, starting from March 11, which could drive future monetization. While the short-term pressure from Google’s move is evident. Figma’s strong growth trajectory and deep artificial intelligence integration suggest an ongoing relevance in the evolving design landscape.
