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“Figma Surges After Citi Initiates Buy Rating, Sees AI Driving Next Wave of Growth” 🚨🚨🚨

Figma shares climbed in premarket trading after Citigroup initiated coverage on the design software company with a Buy rating and a $36 price target, signaling confidence that artificial intelligence could become a major growth catalyst rather than a threat.

The bullish call comes as investors continue debating whether AI-powered design and coding tools will disrupt traditional software platforms. Citi analyst Tyler Radke argues that Figma is well-positioned to benefit from the AI revolution through increased product usage, expanding enterprise adoption, and new monetization opportunities.

According to Citi’s research, conversations with hyperscalers and major financial institutions point to strong demand for seat upgrades and increased utilization of Figma’s AI-related products. These trends suggest that businesses are embracing Figma’s growing suite of AI tools rather than replacing them with competing solutions.

Figma has spent the past year aggressively integrating artificial intelligence into its platform. The company has introduced developer-focused features, AI-assisted workflows, and its own Figma Agent, designed to streamline collaboration between designers, engineers, product managers, and AI systems. Management believes these innovations can transform Figma from a design platform into a central operating layer for digital product development.

Another area generating investor excitement is Figma’s Model Context Protocol (MCP) server initiative. The emerging framework could allow AI models to interact directly with design environments, potentially creating entirely new revenue streams and strengthening Figma’s position within enterprise AI ecosystems.

The positive analyst commentary follows a strong earnings report in which Figma exceeded revenue expectations and raised its full-year guidance. Company executives highlighted encouraging adoption rates for AI-powered products and expressed confidence that AI will drive long-term customer engagement.

Despite the recent optimism, Figma has faced significant challenges in 2026. Shares have fallen more than 50% year-to-date as investors worried that AI-generated code and competing AI-native platforms could reduce demand for traditional seat-based design software. Concerns have also grown around competition from rapidly evolving AI companies that are developing tools capable of automating portions of the design process.

However, Citi’s bullish outlook suggests those fears may be overblown. If Figma successfully monetizes its AI capabilities while maintaining its dominant position among designers and product teams, the company could emerge as one of the biggest winners in the next phase of enterprise AI adoption.

For investors, the key question is whether AI will replace design software—or make platforms like Figma even more essential. Citi appears firmly in the latter camp.