Figma, a cloud-based UX/UI software company, went public last year at $33 a share, soaring to $142.92 before dropping. It now hovers around $37.33, down 75% from its peak. Despite strong earnings, the stock has disappointed investors. However, Adobe’s failed acquisition of Figma for $20 billion indicates potential for growth.

Figma’s fundamentals are stronger than when Adobe valued it years ago. The company invested in AI tools like Figma Make, Figma Sites, and Figma Buzz. It acquired Weavy, rebranded as Figma Weave. With revenue up 38% to $274.2 million in Q3, Figma remains profitable and a key player in web design software.

Despite Wall Street’s response to Figma’s AI investments affecting profits, the company’s tools position it well in the AI-driven software market. With a price-to-sales ratio of 15, Figma is seen as a reasonable investment, especially given its profitability and endorsement from Adobe. The stock shows potential for significant growth in the coming year.

The Motley Fool Stock Advisor team did not include Figma in its top 10 stocks to buy, yet Figma’s strong fundamentals and growth potential make it an attractive investment option. With a track record of significant returns compared to the S&P 500, Figma presents an opportunity for investors seeking growth in the AI software sector.

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